MNB three-month FX swaps see bids after four weeks without demand

MNB

The National Bank of Hungary (MNB) received and accepted €35m bids for three-month floating rate EUR/HUF swaps at its weekly tender on Monday.

Interest in the fx swaps returned after no bids in the previous four weeks. The last tender with demand and allocation, of €125m, was on September 5. Demand for the facility rose to fluctuate between €65m and €255m 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 and early September.

The MNB offered the usual maximum of €400m three-month swaps at a maximum 231.31 swap points on Monday. It allocated all the swaps at the maximum swap points. With €5m expiring on Wednesday, the outstanding volume will rise to €845m on the October 12 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.

After a jump around the end of last year, demand for the weekly tenders subsided in the spring, before rising steeply again, reflecting uncertainties surrounding Greece, by late June. There was little interest for most of July, but demand returned in August.

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.

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