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Higher Mandatory Reserve Ratio Soaks up Banking Sector Liquidity

Banking

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Forint liquidity of the Hungarian banking sector narrowed in April as a higher mandatory reserve ratio came into effect, the National Bank of Hungary (MNB) said in a monthly report on Monday.

The mandatory reserve ratio was raised from 5% to 10% from April 1, lifting lenders' reserve requirement from HUF 2.341 trillion in March to HUF 4.405 tln in April. Balances on banks' reserve accounts were a little over the requirement, reaching HUF 4.462 tln in April.

The average stock of O/N deposits offered by MNB at daily quick tenders stood at HUF 6.676 tln in April, edging down HUF 21 bln from March.

MNB pays 18% on the deposits, well over the 13% base rate.

The average stock of variable-rate deposits fell by HUF 1.507 tln to HUF 514 bln.

Currency in circulation inched down HUF 21 bln to HUF 8.121 tln.

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