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Banking sector liquidity down in March

Forint liquidity of Hungaryʼs banking sector fell in March from a month earlier, which was mainly reflected in declines in the average stocks of overnight and other deposits, the National Bank of Hungary (MNB) said in a report released today and based on preliminary data.

The average stock of overnight deposits fell by HUF 71.9 billion to HUF 1.301 trillion. The end-of-month and the average stock and of three-month deposits, the main sterilization instrument of the MNB, was stable in March at HUF 75 bln, national news agency MTI reports.

The MNBʼs average stock of external assets was up by HUF 64.5 bln to HUF 7.865 tln. The stock of external assets stood at HUF 7.806 tln at the end of March, up from HUF 7.692 tln at the start of the month.

Transactions increased the stock of external assets by HUF 176.8 bln and revaluations and other factors reduced it by HUF 62.9 bln. The depreciation of the average forint exchange rate pointed to an increase in average stocks, while the increase in end-of-month stock was caused by transfers received from the European Commission.

The average stock of central government deposits was up by HUF 51.2 bln to HUF 720.7 bln in March. The stock stood at HUF 827.5 bln at the end of the month, up from HUF 702.9 bln.

In March, the MNB concluded one- and 12-month transactions with credit institutions at the EUR/HUF FX swap tenders providing forint liquidity. The total average stock of swaps rose during the month. The average stock of currency in circulation continued to rise during the month and reached HUF 5.286 tln by the end of it.

The monthly average of the banking sectorʼs current account balances with the MNB exceeded reserve requirements by HUF 27.2 bln, which is a similar amount as in the previous month. In March, reserve requirements amounted to HUF 207 bln.