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HUNGARY: Liquidity drops in banking sector in November

posted onDecember 13, 2017
nocomment

Hungaryʼs banking sector liquidity fell in November from a month earlier, the National Bank of Hungary (MNB) said in a report on Wednesday based on preliminary data. The fall was reflected in declines in the average stocks of credit institutionsʼ overnight, three-month and other deposits.

The average stock of overnight deposits fell by HUF 35.4 billion to HUF 857.6 bln, while the stock of three-month deposits, the MNBʼs main sterilization instrument, fell by HUF 100 bln to HUF 175 bln during November, the statistical balance sheet of the MNB showed. The average stock was down HUF 49.4 bln at HUF 245 bln during the month.

The average monthly stock of three-month deposits has been declining steadily from month to month as a result of the introduction of a quantity limit on the instrument in October 2016 MNB noted.

The average stock of external assets rose in November, reaching HUF 7,708.1 bln, up by HUF 91.3 bln compared to the previous month. However, end-of-month stocks decreased slightly at the end November standing at HUF 7,537.8 bln, down from HUF 7,636 bln at the start of the month.

Transactions decreased the stock of external assets by HUF 81.1 bln in November while revaluations and other changes by a further HUF 17.1 bln. Foreign currency payments made by the government also pointed to the decrease of the end-of-month stocks. The average stock of central government deposits continued to rise during the month, standing at HUF 987.7 bln, up by HUF 24.3 bln compared to October (963.3 bln)

In November no new contracts were concluded at the one-week and three-month loan tenders. The MNB concluded further one, three and twelve-month transactions with credit institutions at the EUR/HUF FX swap tenders providing forint liquidity. As a result, the stock of swaps continued to increase.

The monthly average of the banking sector’s current account balances with the MNB exceeded reserve requirements by HUF 11.6 billion, a more significant extent compared with the previous month. In November, reserve requirements amounted to HUF 193.6 billion

The overnight interbank interest rate fluctuated at the bottom of the interest rate corridor throughout November MNB said. The Hungarian National Bank was established in 1924 and succeeded the Royal Hungarian State Bank, which introduced the Hungarian forint on 1 August 1946.