Budapest, 1 April 2020 – The National Bank of Hungary (NBH) decided to regularly announce one-week deposit tenders. The instrument helps to manage the banking system's liquidity more efficiently by tying up the liquidity of the banking system at policy interest rate of 0.9%. The central bank announces the weekly deposit instrument every week. The date of the first tender is Thursday, 2 April.

NBH monitors closely the developments of interbank liquidity. Events of recent weeks and the uneven distribution of liquidity between banks rationalize the introduction of a liquidity-absorbing deposit facility. During the fall of 2016, NBH included the one-week deposit facility in its potential monetary policy instrument set, which is now being activated. The one-week deposit facility, as part of the central bank's liquidity management toolkit, may contribute to improving the efficiency of the banking system's liquidity management and may support the decrease of banks' overnight deposits.

The one-week deposit pays the fixed policy rate of 90 basis points, while the O/N deposit rate is -5 basis points. The instrument is available to members of the central bank's monetary policy counterparties. The deposit tender is announced by NBH every week, and settlement takes place on the day of the tender. Allocated amount will be determined based on the assessment of actual liquidity conditions. NBH uses the one-week deposit facility actively and announces it regularly as long as liquidity conditions so corroborate. The technical parameters are available at the website of NBH.

The date of the first tender is Thursday, April 2, and the parameters of the tender will be published by the MNB at 12:00 noon.

National Bank of Hungary