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MNB allocates €80 mln of three-month FX swaps at Monday tender

The National Bank of Hungary (MNB) received and accepted €80 million bids for three-month floating rate EUR/HUF swaps at its weekly tender on Monday. Demand rose compared to the previous two tenders which saw bids of €5 million and €7 million.

The MNB offered the usual maximum of €400 million three-month swaps at maximum acceptable 258.59 swap points for expiry on July 13. With €30 million in expiries, the outstanding volume will drop to €423 million on the April 13 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 €410m on December 24, at the last tender of 2010 when it exceeded the volume on offer for the first time since March 2009. After no bids between February 14 and February 28, interest for the three-month returned EUR/HUF swaps revived 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/€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.