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First FX-swap tenders end without allocation

The Hungarian Central Bank (MNB) said there was no allocation at its two-way rapid FX-swap tenders on Monday. The result came after the forint returned to its Thursday levels against the euro after a sharp weakening on Friday.

The MNB did not publish the volume of bids at either auction. Market insiders said, however, that bids arrived only for the tender providing euro liquidity.

There was not sufficient demand or supply at the morning FX-swap tender, an MNB spokesman told Econews, adding the bank did not wish to provide further details. The market was able to manage the situation without the central bank, the spokesman said, adding that the MNB will continue to be at disposal if there is a need from the market.

The MNB invited the tenders with a 2.60 maximum swap point set for bids for euro liquidity and a minimum swappoint of 3.15 set for the bids applying to swap euros for forints.

MNB governor Andras Simor announced on Friday that the NBH would introduce daily short-term euro-swap tenders from Monday to boost short-term foreign currency liquidity, acting as an inter-mediator between banks, after a sharp weakening of the forint late on Thursday and Friday morning.

The central bank said later on Friday it will start holding parallel rapid FX-swap tenders, providing both euro and forint liquidity, from Monday. The free tenders, invited without pre-set volumes, are on the overnight term, with a minimum/maximum limit on implied euro yields, and evaluation rules ensure that the volumes accepted at the two tenders - held at the same time - will be the same. (MTI – Econews)