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MNB allots combined HUF 175 bln at EUR/HUF FX swap tenders

MNB

MNB headquarters in Budapest (Image by Jessica Fejos)

The National Bank of Hungary (MNB) injected HUF 175 billion of forint liquidity into the Hungarian banking system Monday via its "fine-tuning swap tenders," where it offers one-month and three-month forint swaps against euros, state news wire MTI reported.

The offered amount for the one-month EUR/HUF FX swap tender was EUR 164 million (HUF 49.8 bln). Banksʼ bids totaled EUR 138 mln, or HUF 41.97 bln, of which the MNB accepted bids worth HUF 24.94 bln.

For the three-month tender the offered amount was EUR 328 mln, or HUF 99.75 bln. Bids reached EUR 530 mln, or HUF 161.18 bln, and the MNB allotted HUF 149.93 bln.

Three banks participated at the one-month tender and five banks at the three-month tender.

The tender on Monday raises the total stock of the swaps from HUF 950 bln to HUF 975 bln. Outlays include HUF 175 bln of one-month, HUF 400 bln of three-month, HUF 250 bln of six-month, and HUF 150 bln of twelve-month swaps.

The central bank introduced the tenders for the FX swaps last autumn as an instrument for managing market liquidity after it put a cap on placements in three-month deposits, its main sterilization instrument.

The MNB has said it continuously observes liquidity trends and stands prepared to hold further tenders for the instruments if it sees "substantial and lasting" deviations, MTI noted.

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