Tender raises ‘fine-tuning’ FX swap stock to HUF 1,506 bln

Telco

The National Bank of Hungary (MNB) injected a gross HUF 75 billion, or net HUF 50 bln, forint liquidity into the Hungarian banking system through "fine-tuning swap tenders" on Monday, where it offered one-month and three-month forint swaps against euros, state news agency MTI reported.   

The tender will raise the total stock by HUF 50 bln to HUF 1,506 bln as HUF 25 bln of one-month swaps will expire on the value date of the tender on Wednesday.

From Wednesday, the total stock of outlays will include HUF 109 bln of one-month, HUF 150 bln of three-month, HUF 173 bln of six-month, and HUF 1,074 bln of 12-month swaps.

On Monday, HUF 114 bln of bids arrived from banks for the offered HUF 25 bln (EUR 79 mln) of one-month EUR/HUF swaps, of which the MNB accepted HUF 50 bln.

Some HUF 31 bln worth of bids were submitted for the three-month swaps, of which the MNB accepted the offered HUF 25 bln.

The central bank did not invite bids on the six-month or  12-month maturities.

There were six banks bidding at the one-month tender and two bidders at the three-month tender.

The central bank introduced the tenders for the FX swaps last autumn as an instrument for managing market liquidity after it put a cap on placements in three-month deposits, its main sterilization instrument.  The MNB has said it continuously observes liquidity trends and stands prepared to hold further tenders for the instruments if it sees "substantial and lasting" deviations.

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