The European Central Bank (ECB) and the Magyar Nemzeti Bank (MNB) set up a repo line agreement in July 2020 to provide euro liquidity to Hungarian financial institutions in order to address potential foreign exchange liquidity needs during market turbulances resulting from COVID-19 pandemic. Given the financial market tensions caused by the Russian-Ukrainian war, at the initiative of the MNB, the ECB decided on 10 March 2022 to extend the repo facility until mid-January 2023.

The MNB welcomes the extension of the agreement, so that the safety net provided by the ECB among others remains available to provide euro liquidity to Hungarian financial institutions if needed in the current turbulent financial market environment, thereby strengthening monetary transmission and financial stability. The extended agreement will make the MNB enable to ensure that FX swap market yields develop consistently with the level of short-term rates deemed optimal by the Monetary Council. Under the agreement, the MNB will be able to borrow up to €4 billion.