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Demand for three-month FX swaps drops to €40m at central bank tender

The National Bank of Hungary (MNB) received and accepted €40m bids for floating-rate three month EUR/HUF swaps at its regular weekly tender on Monday.

Demand and allocation dropped from €155m one week earlier.

The MNB offered the usual €400m floating-rate three month EUR/HUF swaps at a maximum price of 346.02 swap points, which was also the only price in bids and allocation. With €35m expiring, the stock outstanding of the three-month EUR/HUF swaps will rise to €1.36bn on the January 11 settlement day.

The €290m EUR/HUF one-week swaps the MNB allocated on December 27 in a one-off tender held to help banks to manage their foreign-exchange liquidity at the end of the year expired already on January 4.

Demand for fx swaps tends to be seasonally high by the end of the year, and has been also increased by a government scheme in which retail fx mortgage borrowers can fully repay their loans at discounted exchange rates.

The MNB operates two EUR/HUF swap facilities, a one-day one operated daily and the three-month one once a week on Mondays.