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MNB three-month FX swap tender attracts no bids

The National Bank of Hungary (MNB) received no bids for three-month floating rate EUR/HUF swaps at its weekly tender on Monday.

The previous tender saw bids of EUR 50m but there were no bids on the preceding one on.

The MNB offered the usual maximum of EUR 400m three-month swaps at maximum acceptable 245.58 swap points for expiry on August 3. With EUR 5m in expiries, the outstanding volume will remain at EUR 444m on the May 4 settlement day, Econews calculated.

The stock outstanding has stabilized around or somewhat over EUR 400 million in the past month.

Demand for the facility was high, only with a few exceptions, from the end of October up to February 7 and peaked at EUR 410m on December 24, at the last tender of 2010 when it exceeded the volume on offer for the first time since March 2009.

The stock reached an all-time high, of EUR 1.922 billion, at the end of 2010 as liquidity on the interbank swap market narrowed due to rising swap market spreads and seasonal factors. After no bids between February 14 and February 28, interest for the three-month EUR/HUF swaps revived in March and varied in April.

The NBH 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 NBH 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.