Foreign assets of Hungary’s central bank rose by HUF 1,279.7 billion last month to HUF 6,175.7 billion at the end of November, National Bank of Hungary (MNB) statistical balance figures published on Friday show.
The rise stemmed from HUF 1,376.6 billion in external lending transaction combined with a HUF 96.9 billion loss on exchange rate changes, suggesting that the bank laid out the €4.9 billion IMF loan that the government called down in the first half of last month. On the liability side, on the other hand, central bank deposits of the central government jumped HUF 1,263.3 billion to HUF 1,679.1 billion as the combined result of HUF 1,336.5 billion in transaction and HUF 73.2 billion in revaluation losses.
Commercial banks and financial institutions withdrew HUF 221 billion from their deposits at the central bank and raised their stock of two-week central bank bills by HUF 287.6 billion to HUF 891.5 billion at the end of November. Deposit stock of the banking sector at the central bank stood at HUF 1,133.8 billion at the end of last month, HUF 7 billion over the mandatory reserve obligation, the MNB report on the November statistical balance revealed.
In a move to boost liquidity in the financial sector, the central bank lowered the mandatory reserve rate from 5% to 2% from December. Calculated from the end-November deposit level, the lower mandatory reserve obligation releases some HUF 670 billion in excess liquidity in Hungary’s financial system.
The MNB report cited as proof of cautious liquidity management in the finance sector the HUF 420 million rise in the monthly average stock of domestic central bank assets, as the bulk of the rise came from two-week and six-month central bank loans. As compared to the high increase in monthly average stock in domestic MNB assets, the month-end figure shows an increase of less than HUF 130 billion in November. (MTI-Eco)