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MNB weekly QE purchases stand at HUF 50 bln

MNB

Photo by Jessica Fejos

The National Bank of Hungary (MNB) bought HUF 50 billion of securities in the framework of a quantitative easing program in the week ended January 17, including HUF 10 bln purchased outside of auction, data released by the central bank show.

MNB bought HUF 40 bln of government securities at a weekly auction, as has been its practice in earlier weeks. It bought HUF 8 bln of 2031/A bonds, HUF 21.0bn of 2033/A bonds, HUF 10 bln of 2038/A bonds and HUF 1 bln of 2041/A bonds. It purchased an additional HUF 2 bln of the 2031/A bonds, HUF 5 bln of the 2033/A bonds, HUF 2 bln of the 2038/A bonds and HUF 1 bln of the 2041/A bonds outside of auction.

MNB bought no non-government securities with state guarantees during the week.

The central bank started buying securities outside of auction for the first time in months in mid-October, after central bank policymakers decided to take a "flexible approach" to the scale of the securities purchased in the framework of the QE program. MNB's Monetary Council also decided to raise the threshold for purchases of certain series of government securities from 33% to 50% and to expand the range of assets available for purchase to government-guaranteed debt securities, such as those issued by Magyar Eximbank and the Hungarian Development Bank (MFB).

The bank's 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 trillion.

The total purchases made in the framework of the QE program reached HUF 1.142 tln on January 17, including nearly HUF 1.094 tln of government securities and HUF 48.3 bln of bonds from other issuers with government guarantees.

MNBlaunched the QE program in the spring "to prevent damage...to monetary policy transmission and manage economic and financial risks arising from the coronavirus pandemic", according to state news wire MTI.

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