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MNB injects HUF 200 bln into market at swap tender

MNB

The National Bank of Hungary (MNB) said on Monday it had injected another HUF 200 bln forint liquidity into the Hungarian banking system through its second "fine-tuning swap tender" where it offered one-month forint swaps against euros, Hungarian news agency MTI reported.

Including the previous tender, the MNB has injected HUF 400 bln liquidity into the system through the new facility.  

The offered amount for the EUR/HUF FX swap tender was EUR 500 million (HUF 150 bln) and the maturity of the swaps is one month, similar to the first such tender held on October 17.  

Banksʼ bids totaled EUR 1.62 bln (HUF 500 bln), of which the MNB accepted bids worth EUR 649 mln or HUF 200 bln, raising its original offer by a third as it did at the first tender. Demand at the tender was EUR 110 mln lower than a week earlier.

Similarly to the previous tender, 13 banks participated at Mondayʼs swap tender. 

The central bank announced in late September that, related to the volume limit it set for its main liquidity management instrument, the three-month deposit starting October, it will operate, on a case-by-case basis, fine-tuning instruments – FX swap tenders reducing and increasing forint liquidity – to tackle considerable and persistent liquidity shocks. 

The MNB said it will continue to watch the markets closely and will hold fine-tuning tenders if necessary.

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