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MNB allocates EUR 40m of three-month FX swaps at Monday tender

The National Bank of Hungary (MNB) received and accepted EUR 40 million bids for three-month floating rate EUR/HUF swaps at its weekly tender on Monday.

There were no bids last week and the previous two tenders attracted bids of a combined EUR 75 million.

The MNB offered the usual maximum of  €400m three-month swaps. The average accepted price moved between 247.40 and 247.42 swap points and averaged 247.42 which was also the acceptable maximum. With no expiries, the outstanding volume will rise to €517 million on the June 1 settlement day, Econews calculated.

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 central bank three-month EUR/HUF swaps revived in March and varied in April and May.

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 ran out as planned by the end of 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.