MNB Phases out Variable-rate Longer-term Deposit Facility

MNB

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The National Bank of Hungary (MNB) on Wednesday announced the discontinuation of its variable-rate deposit facility with terms up to six months from January 31, according to a report by state news wire MTI.

The measure is part of a streamlining of MNB's monetary policy toolkit launched in the fall of 2023 with the discontinuation of the central bank's O/N quick deposits offered at daily tenders and a shift to reserve accounts as the main instrument for sterilizing banking sector liquidity.

The discontinuation of the variable longer-term deposit facility will "further enhance the role of the central bank base rate and the effectiveness of monetary policy transmission", MNB said.

Average stock of variable rate deposits of lenders with the central bank stood at HUF 690 bln in the month of December, the latest MNB data show.

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