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Free liquidity of banks little changed in August

The free liquidity of Hungary's banking sector was little changed in August from the previous month, similar to the previous three months.

The stock of two-week National Bank of Hungary (MNB) bonds rose, while the average stock of outstanding foreign exchange swaps was unchanged and O/N deposits with the central bank dropped, the MNB said on Monday.

The average stock of outstanding two-week MNB zero-coupon bonds, the bank's main liquidity-management instrument, rose HUF 99 billion to HUF 3,867 billion in August after declining HUF 293 billion in July. The average stock of the bonds fell a combined HUF 686 billion between April and July after steady rises of a combined HUF 1,091 billion between December and April.

The average stock of the O/N deposits fell by HUF 129 billion last month to HUF 158 billion. This was the first decline since a steep HUF 148 billion drop, to HUF 62 billion, in April and combined increases of HUF 225 billion from April to July.

The average stock of forex swaps was practically unchanged at HUF 462 billion. The stock of swaps peaked at HUF 362 billion in January 2010, dropped to HUF 87 billion in May and rose sharply both in June and July.

After increases in the previous two months, average deposits of the central government fell HUF 71 billion in August to HUF 1,378 billion,

The MNB's average stock of external assets fell HUF 167 billion after a HUF 116 billion rise in July, to HUF 10,022 billion. The drop was the first one registered since last October. The average stock of external liabilities rose just HUF 7.9 billion after a HUF 218 billion rise in July, and a similar increase in June increase, to HUF 1,381 billion. Meanwhile, the forint firmed on average 0.9% against the euro.

The average current account balance of the banking sector with the MNB in August exceeded banks' combined reserve requirements by HUF 6.6 billion, more than usual.

Average cash in circulation rose HUF 19 billion to HUF 2,349 billion. After dropping in March cash in circulation has risen moderately each month. (MTI – Econews)