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MNB allocates €5 mln of three-month FX swap at weekly tender

The National Bank of Hungary (MNB) received and accepted EUR 5 million bids for three-month floating rate EUR/HUF swaps at its weekly tender on Monday. Demand fell compared to the previous three tenders, which saw bids between EUR 70 million and EUR 105 million.

The MNB offered the usual maximum of EUR 400 million three-month swaps at maximum acceptable 267.39 swap points for expiry on June 29. With EUR 400 million in expiries, the outstanding volume will drop to EUR 444 million on the March 30 settlement day, Econews calculated.

Demand for the facility was high, only with a few exceptions, from the end of October up to February 7 and peaked at EUR 400 million -- the currently expiring swaps -- at the last tender of 2010. After no bids between February 14 and February 28, interest for the three-month returned EUR/HUF swaps returned in March.

The MNB started to offer three-month floating-price EUR/HUF swaps and six-month fixed-price EUR/HUF swaps to banks weekly in March 2009. The fixed-price six-month EUR/HUF swap facility for which the MNB stopped to invite new bids as planned last July, ran out on November 24, 2010. The bank also offered one-week CHF/EUR swaps weekly between February 2009 and January 2010.

The bank has been operating one-day FX swaps daily since October 2008. The swap facilities were launched to ease Hungarian banks' access to FX financing.