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Banking sector liquidity continues to grow

Surplus liquidity in Hungary's banking sector rose further in September, with the average stock of two-week MNB bills rising the most, continuing the trend recorded over the previous five months, the preliminary statistical balance sheet of the National Bank of Hungary (MNB) published on Monday showed.

The average stock of two-week MNB bills grew to HUF 3,438.8 billion from 3,299 billion in August. An even larger part of the liquidity increase again, however, stemmed from a large, HUF 187.9 billion, drop in the central government's deposits with the MNB to HUF 1,035.3 billion.

The fall in the central bank's average stock of FX swaps from credit institutions also contributed to the increase in surplus liquidity, continuing the trend registered over the previous four months. On the assets side of the balance sheet, the average stock of assets vis-a-vis non-residents rose, mainly as a result of the carry-over effect of the SDR allocation by the IMF to the MNB in August.

As usual, the average of the banking sector’s current-account balances with the MNB was only slightly different from its reserve requirements, with the amount of surplus reserves being HUF 0.8 billion. The overnight interbank lending rate remained close to the bottom of the interest-rate corridor throughout September. The average stock of currency in circulation fell compared to August. (MTI-Econews)