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MNB set to reduce three-month depo stock

Telco

Image by Jessica Fejos

The National Bank of Hungary (MNB) has capped the amount of placements in its three-month deposit at a tender on Wednesday at HUF 125 billion, HUF 150 bln less than the deposits maturing in the facility, the tender invitation on the bankʼs website shows.

After the tender, the three-month depo stock will be reduced from HUF 450 bln to HUF 300 bln, at most. The MNBʼs Monetary Council said earlier that the stock of three-month deposits, the central bankʼs main sterilization instrument, would fall to HUF 300 bln by the end of the third quarter, national news agency MTI reports.

Central bank policy-makers have gradually reduced the three-month depo stock since last autumn by setting end-of-quarter caps. The measure is one of several "unconventional" policy moves to support monetary easing while keeping the base rate unchanged.

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