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MNB allocates €55m in three-month FX swaps at tender

The National Bank of Hungary (MNB) received bids for and allocated €165m three-month floating rate EUR/HUF swaps at its weekly tender on Monday.

Demand rose from €35m a week earlier but was €10m under the expiring volume. Demand for the three-month FX swaps reappeared on November 2 after practically no interest between September 12 and October 24.

The MNB offered, as usual, a maximum of €400m three-month swaps on Monday, and the swaps were offered at a maximum 319.20 swap points. With the €65m swaps expiring on Wednesday, the outstanding volume will drop to €480m on the November 16 settlement day, Econews calculated.

The stock reached €1.48bn, its highest level since early February, on September 5.

Demand for the facility rose for most of August parallel with the steep strengthening of the Swiss franc, in which a large part of the Hungarian retail loan stock is denominated, against the forint. It vanished after the Swiss National Bank announced a 1.20 CHF/€target early September, and reappeared at the beginning of November.

The MNB has been offering three-month floating-price EUR/HUF swaps since March 2009. It also has been operating one-day FX swaps daily since October 2008. The swap facilities, with two other ones already eliminated, were launched to ease Hungarian banks’ access to FX financing.