Stock of 3-month deposits hits end-of-quarter target
The National Bank of Hungary (MNB) accepted HUF 25 billion of placements in its three-month deposits for banks at a tender on Wednesday, the same as the announced limit. The tender reduced the three-month deposit stock from HUF 175 bln to HUF 75 bln.
Banks bid to place HUF 121 bln in the facility, the central bankʼs main liquidity sterilization instrument, compared to HUF 125 bln in maturing three-month deposits, noted state news agency MTI.
The MNBʼs Monetary Council reduced the cap on the stock of three-month deposits to HUF 75 bln for the end of the fourth quarter at a policy meeting in September.
On Wednesday, the central bank said that imposing the limit on the three-month deposit stock has fulfilled its purpose and the cap will not be lowered further. 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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