MNB announces December dates for FX swap tenders 

MNB

Image by Jessica Fejos

The National Bank of Hungary (MNB) on Friday announced dates for FX swap tenders providing euro liquidity and a discount bill auction in December to reduce end-of-quarter swap market tensions, according to a report by state news wire MTI.

The central bank started the practice of holding the end-of-quarter FX swap tenders in September 2020 to improve the effectiveness of monetary policy transmission. MNB policymakers decided to add the discount bill, with a maturity of up to one month, to the policy toolkit on a discretionary basis at a monthly policy meeting in November.

MNB said the next FX swap tenders will take place on December 7, 21, 30, and 31. The discount bill auction will be held on December 20.

There will be no quantitative limit at the FX swap tenders, MNB said, adding that it may use its international master repurchase agreements to finance the swap instrument. There will be a quantitative limit for the discount bill.

The value date for the first FX swap tender, with a maturity of one month, will be December 9. The value date of both the discount bill and the second FX swap tender, with a maturity of two weeks, will be December 23, and the value date of the last two FX swap tenders will be December 31. The maturity date of all of the FX swaps and the discount bill will be January 6.

"The purpose of the [MNB]'s active market presence is to manage the effects of end-of-quarter tensions in swap markets, and thereby to strengthen the efficiency of monetary transmission and maintain price stability," the central bank said.

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