The National Bank of Hungary (MNB) said Friday it will hold foreign currency swap and currency interest-rate swap (CIRS) tenders weekly to support a planned joint reduction of the country’s short-term external debt and the stock of two-week MNB bonds under its “Funding for Growth Scheme.” As part of the scheme the MNB plans to reduce the country’s short-term external debt that would allow a reduction of the country’s international reserves without increasing vulnerability, as well as lowering the stock of its two-week bills from HUF 4,500 billion to HUF 3,600 billion. The MNB will provide banks euro liquidity against forint for eight different maturities in the tenders. The tenders will be held on the first trading day of each week starting June 3. Participating banks — domestic banks with direct interbank settlement system membership and with mandatory reserving obligation — must undertake that they reduce the stock of their less-than-one-year foreign funds by at least with the euros they received in the FX swap or CIRS tenders.
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