Free liquidity of Hungary's banking sector was little changed in May after increases in the previous few months as bank raised their O/N central bank deposits while cut the stock of their two-month central bank bonds and their outstanding swaps, the National Bank of Hungary (MNB) reported based on average stocks on Monday.
The average stock outstanding of the two-week MNB zero-coupon bonds, the central bank's main liquidity management instrument, fell HUF 47 billion in May to HUF 4,407 billion. The drop came after steep rises, of a combined HUF 1,091 billion, between December to April.
The average stock of credit institutions’ overnight deposits with the central bank rose HUF 60 billion in May after dropping by HUF 148 billion in April, to HUF 122 billion. The average stock dropped HUF 72 billion from December. The report said that the overnight interbank rate first rose from its early May level at the central bank base close to the top of the interest rate corridor (near the central bank O/N collateralized loan rate), than dropped near the bottom (the central bank O/N depo rate) of the corridor and stayed there except for a temporary rise.
Banks' average stock of FX swaps made with the central bank fell HUF 12 billion a month and dropped HUF 261 billion in the first five months to HUF 87 billion in May.
The National Bank' external liabilities rose HUF 47 billion in May to average HUF 943 billion, and its average external assets rose HUF 429 billion to HUF 9,686 billion. The bulk of the forint-term rise reflected, however, a 4.1% weakening of the forint against the euro and a 11.2% weakening against the US dollar from April to May. Based on end-of-month figures, external liabilities of the central bank rose HUF 32 billion thanks to transactions and HUF 77 billion due to other changes, including exchange rate changes. On the other side of the balance sheet, the bulk or HUF 44 billion of the HUF 499 billion increase of external assets in May, to HUF 9,93 billion at the end of last month, reflected exchange rate movements.
Average external liabilities rose HUF 241 billion from January 2010 and external assets rose HUF 1,105 billion, available MNB figures show.
The MNB on average held a total of HUF 400 million collateralized two-week loans, unchanged from the previous month, and held none of six-month loans on average in May.
Average central government deposits with the MNB decreased by HUF 28 billion from the previous month to HUF 1,264 billion, but were still up HUF 321 billion from December. End-of-month figures showed that central government deposits rose HUF 186 billion last month to HUF 1,524 billion at the end of May.
The average of the banking sector’s current account balances with the MNB in May surpassed from banks' combined reserve requirements by HUF 4 billion, more than the usual less than HUF 1 billion.
The average stock of currency in circulation rose HUF 77 billion in May after a HUF 12 billion increase in April, and reached HUF 2,247 billion, still down a slight HUF 22 billion from December. (MTI-ECONEWS)