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MNB scraps QE program series threshold

MNB

Photo by Adriana Iacob/Shutterstock.com

National Bank of Hungary (MNB) policymakers have decided to remove a limit on the volume of securities series the central bank may purchase in the framework of its quantitative easing program, according to a report by state news wire MTI.

"If warranted by the stability and liquidity position of the government securities market, the [MNB]'s purchases may exceed the 50 percent share of individual series," the central bank said on Tuesday.

"This modification does not affect weekly amounts of purchases, only the structure of purchases, and therefore the [MNB]'s monetary policy stance will remain unchanged," it added.

The measure is "expected to enhance the flexibility of the programme and the effectiveness of government securities purchases", MNB said. 

The central bank reiterated that it will use the QE program "through a lasting market presence to the extent and for a period necessary".

MNB has been buying HUF 60 bln of securities a week in the QE program since February. The total purchases made in the framework of the QE program reached approximately HUF 1.547 trillion on March 7, including nearly HUF 1.499 tln of government securities and HUF 48.3 bln of bonds from other issuers with government guarantees.

The central bank 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.

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