The reserves fell just more than €10 bln from a year earlier, when they stood at €34.615. They dropped €5.766 bln from the end of 2015.
Factors reducing the reserves in July included the redemption of a €1 bln bond, carrying a 3.5% annual coupon, which was issued in January 2006 and expired on July 18. There were no major foreign issues in July.
Reducing the level of international reserves, in line with a decline in Hungaryʼs short-term external debt, has been the stated policy of the MNB. Foreign reserves reduction has also been supported by measures that have shifted the financing of government debt to local banks and domestic retail investors, a declining share of FX state debt and the expiry of FX swaps related to the conversion of retail FX loans into forints.
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