2 March 2021
The Magyar Nemzeti Bank will hold foreign exchange swap tenders providing euro liquidity at the end of March 2021. The purpose behind the announcement of the facility is to ensure that changes in short-term yields continue to be in line with short-term yields deemed optimal by the Monetary Council in every sub-market at all times. The tenders will be announced without a quantitative limit. The Bank may use its international master repurchase agreements to finance the tenders.
On 8 September 2020, the Monetary Council decided to use swap tenders providing foreign currency liquidity, if necessary, in addition to the regular announcement of the swap facility providing forint liquidity, to improve the effectiveness of monetary policy transmission. In the end of September and December 2020, the MNB conducted four-four foreign exchange swap tenders providing euro liquidity to manage tensions in the swap market at the end of the quarters. The tenders met the objectives set by the Monetary Council, as swap quotes were smoothed and the swap market was stabilised.
Consistent with the Monetary Council’s decision on 8 September 2020 and to ensure that changes in short-term yields continue to be in line with the short-term yield deemed optimal by the Monetary Council at every sub-market at all times, the Magyar Nemzeti Bank will conduct foreign exchange swap tenders providing euro liquidity at the end of March.
The tenders will take place on 24, 29, 30 and 31 March 2021. The first tender’s starting value date will be 26 March, its maturity date will be 8 April 2021. The other three tenders’ starting value date will be 31 March, the maturity date of them will be Thursday, 1 April 2021. The tenders will be announced with no quantitative limit. The Bank may use its international master repurchase agreements providing euro liquidity to finance the swap instrument.
The announcement containing the parameters of EUR/HUF foreign exchange swap tenders of 24, 29 and 30 March 2021 will be published on the Bank’s and agencies’ websites at 8 am and that of the 31 March tender at 11 am on the day of the tender. The notice on the swap facility providing euro liquidity is available at the following link: Notice.
The MNB modifies its one-week deposit instrument’s tender and maturity days connecting to FX-swaps providing euro liquidity in order to support the liquidity management of these swaps. The maturity day of one-week deposit tender on 25 March 2021 will be 31 March 2021, therefore on the week starting with 29 March 2021 the one-week deposit tender will be hold on Wednesday, 31 March 2021, with a maturity day on Thursday, 8 April.
Dates of central bank FX-swap and one-week-deposit tenders between 22 and 31 March 2021
In line with the practice of the last two quarters swap tenders providing forint liquidity will not be held between 22 and 31 March 2021. The MNB will return to the current swap tender providing forint liquidity practice from the week starting with 5 April 2021.