MNB allots banks nearly €980 mln for FX payments

MNB

DO NOT USE, TOO SMALL

The National Bank of Hungary (MNB) on Monday alloted banks a combined €980 mln of FX liquidity in the first round of tenders it launched to help banks to meet the FX demand when paying the refunds due to borrowers to compensate them for practices declared unfair by July legislation.

The foreign currency allocated on Monday is nearly one-third of the combined €3 bln total the MNB Monetary Council decided late September to allocate from the central bank international reserves to cover banks' FX demand related to the settlement of the refunds. The MNB programme announced in September consists of two FX tender facilities to be operated weekly, or more frequently if necessary, starting October 13, 2014 and lasting at least until the end of March 2015.

Monday's demand focused on the unconditional facility which, from the banks' perspective, is the combination of a spot euro purchase and an opposite-direction multi-currency interest rate swap (CIRS) expiring in 2016 or 2017. The MNB alloted €750m in the unconditional facility on Monday. It had earmarked a total of €1 bln of its reserves for the facility in September.

Monday's bids and allotment totalled €230m in the conditional facility for which the MNB had allocated a total of €2 bln. In the conditional facility, banks can buy spot euros from the MNB, with the euros bought rolled over in opposite-direction one-week FX swaps at the MNB until the euro is actually used in the settlement of the refunds. The condition is that banks reduce their short-term external debt by 50% of the euros actually used.

ADVERTISEMENT

Századvég raises GDP forecast to 7.8% Analysis

Századvég raises GDP forecast to 7.8%

Opposition parties to begin PM candidate primaries Elections

Opposition parties to begin PM candidate primaries

New editor-in-chief at Betone Studio Appointments

New editor-in-chief at Betone Studio

Budapest leaders make public transport free for under-14s City

Budapest leaders make public transport free for under-14s

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.