MNB's Monetary Council said after a monthly policy meeting on January 26 that they would maintain their policy stance but reallocate liquidity from the MNB's collateralized lending facility to its QE program, stepping up purchase volume and standing ready to expand purchases to securities under 10 years.

The central bank started buying terms under 10 years in the last week of January, and raised its weekly purchase volume to HUF 60 bln in the first week of February from a weekly HUF 50 bln-55 bln in the period since October.

The latest weekly QE data show the central bank bought HUF 25 bln of securities at auction and HUF 35 bln outside of auction. The terms bought outside of auction were all under 10 years.

MNB made no purchases of non-government securities with state guarantees, such as those issued by Magyar Eximbank or the Hungarian Development Bank (MFB), during the week.

The total purchases made in the framework of the QE program reached nearly HUF 1.427 trillion on February 19, including approximately HUF 1.379 tln of government securities and HUF 48.3 bln of bonds from other issuers with government guarantees.

MNB rate-setters performed a "technical revision" on the QE program at their November policy meeting and said the next technical revision would be performed when the stock reaches HUF 2 tln.

The central bank launched the QE program in the spring "to prevent damage…to monetary policy transmission and manage economic and financial risks arising from the coronavirus pandemic".