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MNB international reserves fall €678 mln in June

MNB

The National Bank of Hungaryʼs (MNB) international reserves stood at €24.785 billion at the end of June, down €678 million from the previous month, preliminary data released by the central bank today show, according to MTI. While this is reported to be the lowest amount of foreign currency reserves in more than five years, MNB says the reduction is intentional.

The reserves were down almost €10 bln down from the same period a year ago, when they were at €34.761 bln, according to the report.

There were no major FX bond expiries or issues in June. 

The MNB has said it plans to reduce the level of international reserves as a matter of policy, parallel with a decline in Hungaryʼs short-term external debt. The central bank said the reduction in foreign reserves makes sense due to measures that have shifted the financing of government debt to local banks and domestic retail investors – as well as a declining share of FX state debt and the expiry of FX swaps related to the conversion of retail FX loans into forints.

The MNBʼs international reserves fell HUF 2.77 bln from the end of March, when they exceeded the countryʼs short-term external debt – debt expiring within one year – by more than 7 bln, according to information in MNBʼs Balance of Payment Report released last week.

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