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Banking sector liquidity narrows further in September

Forint liquidity of Hungaryʼs banking sector narrowed further in September from a month earlier, mainly reflected in a fall in the average stock of one-day deposits, the National Bank of Hungary (MNB) said in a report based on preliminary data Thursday. Forint liquidity has narrowed now for the fifth month running.   

The average stock of money in circulation rose by a further HUF 41.5 bln to HUF 5,810.1 bln. One-day interbank interest rates stayed at the bottom of the interest rate corridor throughout the month, according to a summary by state news agency MTI.

The average stock of overnight deposits fell HUF 159.8 bln to HUF 873.4 bln. The average stock on banksʼ accounts held with the MNB rose HUF 0.4 bln to HUF 236.6 bln, while that of banksʼ other deposits with the central bank rose HUF 5.4 bln to HUF 11.5 bln.

The end-of-month and average stock of three-month deposits, which earlier was the main sterilization instrument of the MNB, remained at HUF 75 bln. 

The MNBʼs average stock of external assets fell by HUF 76.0 bln to HUF 8,472.0 bln. The end-of-September stock stood at HUF 8,316.0 bln, down HUF 238.4 bln from the start of the month, as the strengthening of the forint reduced the stock by HUF 100.4 bln and transactions cut it by HUF 138.3 bln. On average, the forint firmed in September from August, but weakened in an end-of-month comparison, the central bank noted. 

The average stock of central government deposits rose by HUF 65.1 bln in a month to HUF 1,011.6 bln. The stock stood at HUF 1,123.2 bln at the end of the month, rising by HUF 200.8 bln because of transactions, and reduced by HUF 2.3 bln due to revaluation effects.

The governmentʼs forint deposits with the MNB rose HUF 262.1 bln from the end of August to exceed HUF 1,000 bln for the first time since May 2017, while its FX deposits dropped HUF 63.6 bln to HUF 263.3 bln.  

The central bank has kept the outstanding stock of its EUR/HUF FX swap tenders it carries out to provide forint liquidity unchanged now for the fourth month in a row. The average stock of swaps rose just HUF 6.6 bln in September to HUF 2,051.6 bln.  

The monthly average of the banking sectorʼs current account balances with the MNB exceeded reserve requirements by HUF 16.7 bln. Reserve requirements amounted to HUF 220 bln in September.