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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 MNB received and allocated €35m bids a week earlier after no bids in the previous four weeks.

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/EUR target early September.

The MNB offered a maximum of €400m three-month swaps at a maximum 242.79 swap points on Monday. With no swaps expiring on Wednesday, the outstanding volume will remain €845m on the October 19 settlement day, Econews calculated. The stock fell to €815m two weeks earlier after reaching €1.48bn on September 5, its highest level since early February.

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.