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ÁKK transactions, EU transfers raise central bank's international reserves

The National Bank of Hungary's international reserves rose by €1.3 billion to €35.2 billion in the second quarter because of transactions made on behalf of the State Debt Management Agency (ÁKK) and net transfers from the European Union, the central bank's report for the period shows.

Transactions commissioned by ÁKK contributed about €600 million to the increase because of lower repayments. Foreign currency payments made on behalf of budget-funded institutions lowered the MNB's international reserves by €240 million, while net transfers from the EU raised them by €554 million. Yields added €260 million to the increase.

Payments related to the MNB's own debt servicing were under €100 million in the quarter. Most of the amount was from payment on a ¥15 billion MNB bond that matured on April 27.

The MNB's short-term foreign currency deposits were up by €120 million at the end of June from three months earlier.

The MNB held four tenders to purchase mortgage bonds in Q2 under a program announced in February. It accepted just HUF 669 million of offers to sell HUF 30 billion of mortgage bonds at a tender on April 7, but it bought HUF 9.1 billion of HUF 28.9 billion bonds offered at a tender on April 21. The bank accepted a single offer for HUF 185 million of bonds at a tender on May 5. No offers were made at a tender on June 9.

The MNB bought mortgage bonds on the primary market twice in Q2. It bought HUF 2.2 billion of FHB Mortgage Bank bonds at an average yield of 7.20% at an auction on April 14. It bought HUF 48 million of the same series at an average yield of 7.89% at an auction on May 10. (MTI – Econews)