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Banking sector liquidity down in October - MNB

Forint liquidity of Hungaryʼs banking sector fell further in October from a month earlier, indicated mainly by a fall in the average stock of credit institutionsʼ overnight and three-month deposits with the National Bank of Hungary (MNB), the central bank said in a report on preliminary statistical balance sheet data on Tuesday.   

The average stock of overnight deposits of credit institutions fell by HUF 18.5 billion to HUF 893.0 bln in October from the previous month.  The average stock of three-month deposits, earlier the MNBʼs main sterilization instrument, fell by a further HUF 100.6 bln to HUF 294.3 bln. The MNB introduced limits on the volume of three-month depo placements a year earlier.

The average balances of credit institutionsʼ accounts with the MNB edged up HUF 3.2 bln to HUF 196.1 bln.

The average stock of forint liquidity provided by the MNB to banks through EUR/HUF swaps rose HUF 252 bln to HUF 1,216.6 bln. The MNB introduced these "fine-tuning" swaps as an unconventional tool for monetary easing parallel with the cap placed on the three-month depo facility.

Money in circulation rose a further HUF 68.4 bln to HUF 4,908.2 bln.

The average stock of FX swaps allocated to banks in relation to the 2015 FX loan settlement and conversion of retail FX loans into forints dropped HUF 12.3 bln to HUF 76.6 bln.

Among the central bankʼs assets, the average stock of one-week loans to credit institutions fell by HUF 3.5 bln to zero.

The MNBʼs average stock of external assets rose by HUF 160.9 bln to HUF 7,616.8 bln. In an end-of-month comparison, assets increased by HUF 117.0 bln to HUF 7,636.0 bln, mainly reflecting the rise in the stock of fine-tuning FX swaps and, to a lesser extent, the weakening of the forint.

The average stock of the MNBʼs external liabilities rose HUF 61.8 bln to HUF 881.0 bln, while the end-of-month stock rose HUF 25.8 bln to HUF 793.1 bln. 

The average stock of central government deposits increased HUF 34.5 bln to HUF 963.3 bln. The stock stood at HUF 1,080.6 bln at the end of the month, up HUF 5.9 bln from a month earlier.

The monthly average of the banking sectorʼs current account balances with the MNB exceeded the mandatory reserve requirement by HUF 6.1 bln. In October, reserve requirements totaled HUF 190.0 bln.