23 December 2011 

From the autumn of 2008 on, the MNB has introduced a number of foreign currency swap facilities for various maturities to facilitate domestic credit institutions’ access to foreign currency liquidity. The facilities have greatly contributed to preserving the stability of the Hungarian banking sector. The overnight and three-month FX swap facilities are still available for the Bank’s counterparties.

Due to the closing of open positions at the end of the year, unfavourable swap market developments have been noticeable. Therefore, obtaining foreign currency by resident banks on FX swap market might get more difficult in these days.

The Bank has therefore decided to introduce a new euro liquidity providing EUR/HUF FX swap facility with one week maturity on one occasion to assist domestic credit institutions in managing foreign currency liquidity at the end of the year. Another aim of the Bank is to avoid a large diversion of prices in the EUR/HUF FX swap market from realistic levels and to ensure that forint interest rates remain close to the Bank’s key policy rate in all sub-markets of the domestic money market.

The new EUR/HUF FX swap facility will be undertaken as a variable-rate tender. The time of the tender is 27/12/2011 12:30-1:00pm, the settlement date is 28/12/2011, while the maturity is 04/01/2012. The announced quantity and the minimum acceptable EUR interest rate (highest acceptable swap points) will be included in the tender’s procedures and conditions which will be published on 27/12/2011 10am on the following site:

http://english.mnb.hu/Monetaris_politika/mnben_jegybanki_eszkoztar/mnben_eszkoztar_tenderek/fx-swap-tenders

MAGYAR NEMZETI BANK