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Demand for MNB three-month FX swaps up at €165m

MNB

Demand for the National Bank of Hungary (MNB)’s three-month floating rate EUR/HUF swaps rose and the bank received bids for and allocated €165m at its weekly tender on Monday.

Part of Monday’s demand could come from the renewal of the €255m swaps allocated on August 15 and expiring on the settlement day on Wednesday.

The previous two tenders saw bids and allocations for €30m and €35m after practically no interest in the three-month swaps between September 12 and October 24.

The MNB offered, as usual, a maximum of €400m three-month swaps on Monday, and the swaps were offered at a maximum 305.85 swap points. With the €255m swaps expiring on Wednesday, the outstanding volume will drop to €530m on the November 16 settlement day, Econews calculated.

The stock reached €1.48bn, its highest level since early February, on September 5.

Demand for the facility rose for most of August parallel with the steep strengthening of the Swiss franc, in which a large part of the Hungarian retail loan stock is denominated, against the forint. It vanished after the Swiss National Bank announced a 1.20 CHF/€target early September.

The MNB has been offering three-month floating-price EUR/HUF swaps since March 2009. It also has been operating one-day FX swaps daily since October 2008. The swap facilities, with two other ones already eliminated, were launched to ease Hungarian banks’ access to FX financing.

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