In the current financial market environment, the Magyar Nemzeti Bank continues to seek ways to support domestic credit institutions’ liquidity management using the tools at its disposal. Accordingly, it has amended its monetary policy instruments introduced in the autumn of 2008, as follows.

From 5 May 2009, the number of bids that an individual counterparty may submit at six-month, variable-rate collateralised loan tenders will increase from one to three. Decision on acceptance of bids submitted at six-month, variable-rate collateralised loan tenders will be made taking into account prevailing interbank market rates and government securities yields of comparable maturities, in accordance with existing practice. The Bank commits itself to maintaining its six-month, variable-rate collateralised loan tender facility at least until 30 June 2010. If liquidity strains remain in the interbank market, the Bank will decide whether to extend the availability of the facility.

Liquidity has improved markedly in the domestic FX swap market recently, with credit institutions easing their limits on dealing with each other. As a result, counterparties have made very little use in recent months of the O/N two-way FX swap quick tender (providing euro and forint liquidity) introduced in October 2008. In response to the improvement in market conditions, the Bank has decided to cease to conduct two-way FX swap quick tenders from 18 May 2009. However, it will maintain the availability of its standing one-way O/N FX swap facility on the same terms, in order to reduce excessive volatility of market yields.