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MNB buys just under HUF 10 bln of bonds at QE auction

MNB

Image by Jessica Fejos

The National Bank of Hungary (MNB) bought HUF 9.98 billion of government bonds at an auction on Tuesday held in the framework of an assets purchase program launched in May, according to a report by state news wire MTI.

Photo by Jessica Fejos

MNB accepted HUF 8 bln of HUF 24.75 bln of bids to sell 2038/A bonds, buying the securities at a weighted average yield of 2.69%. The yield was 3 bp over the 15-year secondary market benchmark and 7 bp higher than the yield at the previous QE auction one week earlier.

It accepted HUF 1.98 bln of HUF 19.2 bln of bids to sell 2041/A bonds at a weighted average yield of 2.82%. The yield was 3 bp over both the 20-year benchmark and the yield at the QE auction a week earlier.

MNB held four weekly QE auctions in May, before a hiatus that lasted until the end of July.

After a monthly policy meeting late on July 21, MNB rate-setters said the central bank would start buying "limited amounts" of government securities with maturities over 15 years "to improve monetary policy transmission", but added that the MNB continues to consider the program a "safety net, which it intends to use if and to the extent necessary".

The central bank bought HUF 10 bln of bonds at a QE auction on July 28 and another HUF 10 bln at a QE auction on August 4.

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