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Banks shift part of one-day deposits

  Banks shifted a large part of their one-day central bank deposits into two-week central bank bonds in January, but they still have a large sum in overnight depos, the National Bank of Hungary’s (MNB) preliminary statistical balance published on Thursday shows.

The average stock of banks’ O/N deposits with the central bank fell HUF 395 billion from December to HUF 524 billion in January, while the average stock of two-week bonds outstanding rose HUF 419 billion to a new record of HUF 1,571 billion.

Banks’ average stock of O/N central bank deposits was still high compared to around HUF 50 billion between July and September. The one-day deposit stock jumped a steep HUF 300 billion in October as the financial crisis hit Hungary, and reached almost HUF 1,000 billion in December.

The average stock of two-week and six-month central bank loans outstanding did not change compared to December, the bank said, without revealing figures. Econews put the average stocks of two-week loans at HUF 29 billion, up HUF 10 billion from December, and the average six-month loan stock at an unchanged HUF 145 billion.

There has been no new borrowing of the six-month facility since the middle of November. The MNB introduced the two covered-loan facilities in October as part of measures to consolidate the dried-up government bond market and boost liquidity.

The balance of banks’ current accounts with the MNB averaged HUF 331 billion in January, practically unchanged from December, and exceeding their mandatory reserve obligation by a slight 1.5 billion. (The MNB cut the reserve ratio from 5% to 2% with December effect in November.)

The average figures suggest that banks’ reserve-liable liabilities -- liabilities up to two years on deposits placed or securities bought by non-financial businesses or individuals -- rose just HUF 128 billion in January after an exceptionally steep increase of HUF 828 billion in December, Econews calculated.

Central government deposits with the MNB averaged HUF 1,831 billion in January, up HUF 246 billion from December. A large part of the increase could be the result of the weaker forint on the government’s foreign currency deposits.

Average central government deposits increased HUF 820 billion in November and another HUF 340 billion in December as the government deposited the bulk of the first tranches called down from an IMF and an EU loan with the central bank.

Other central bank liabilities, including foreign liabilities, averaged HUF 1,056 billion in January, up HUF 326.6 billion from December. Part of the rise could be attributed to the weaker forint. MNB average foreign assets rose a steep HUF 449 billion due to the forint’s slip to average HUF 6,978 billion in January. (MTI-Econews)