MNB to hold foreign exchange swap tender providing euro liquidity on 15 September

The Magyar Nemzeti Bank (MNB) is committed to ensuring that in line with the tightening cycle started in June 2021, monetary conditions considered optimal by the Monetary Council are reflected in all sub-markets. In order to manage the domestic effects of end-of-quarter tensions in international swap markets, the Bank will hold a two-week foreign exchange swap tender with a maturity of 1 October 2021, supplementing the already announced quarter-end euro swap tenders. Thus, it will allow the banking system to adjust to the end of the quarter through a total of five tenders. The Bank provides the necessary amount of euro liquidity to the banking system through the tenders, and announces tenders accordingly without a quantitative limit. Also in order to increase the foreign currency liquidity of the banking system, the Bank will not announce its foreign exchange swap tender providing forint liquidity on 13 September 2021.

In order to manage the domestic effects of end-of-quarter tensions in international swap markets, the MNB will hold a two-week foreign exchange swap tender providing euro liquidity on 15 September 2021, with a starting value date on 17 September and maturity date on 1 October. The detailed parameters of the tender will be published by the MNB in ​​the tender announcement of 15 September 2021 at 8 am.

In addition to the foreign exchange swap tender of 15 September 2021, the central bank will hold four additional foreign exchange swap tenders providing euro liquidity at the end of September, in accordance with its announcement of 6 September 2021.

With its decision today, the Bank will allow the accommodation of the banking system at the end of the quarter in a total of five euroswap tenders. The Bank provides through the tenders the necessary amount of euro liquidity to the banking system. The Bank announces the tenders without a quantitative limit and may also use its international master repurchase agreements providing euro liquidity to finance the swap instrument.

Also in order to deal with the domestic effects of swap market tensions, the Bank will not hold forint liquidity-providing foreign exchange swap tender on 13 September 2021.