Budapest, November 30, 2022. Continuing the practice started in October, the Magyar Nemzeti Bank held a variable-rate, long-term deposit tender to sterilize liquidity on a long-term basis. The MNB accepted bids worth HUF 2135 billion. Through the long-term deposit tender, the MNB ensured the absorption of excess liquidity in the banking system, maintaining the tight monetary policy stance and strengthening monetary transmission. These objectives will also be supported by the foreign exchange swap tenders providing euro liquidity and discount bill auctions to be held in December.
During the competitive phase of the 2-month variable-rate deposit tender on 30 November, 15 banks submitted bids totalling HUF 2289 billion, of which the MNB accepted bids of HUF 1618 billion. The weighted average spread of the accepted bids was 4.95 percent above the reference base rate, resulting in an initial average interest rate of 17.95 percent. In the non-competitive phase announced after the tender, the participants offered HUF 517 billion, with a 4.95 percent spread equal to the average interest rate established during the tender, which was accepted by the MNB. The starting value date of the 2-month transaction is 1 December, while the maturity date is 26 January 2023.
Today's tender ensures the long-term sterilization of excess liquidity in the banking system. The total amount of liquidity absorbed by the long-term deposit facility and the reserve requirement system is close to HUF 4850 billion in December. With the absorption of excess liquidity the MNB strengthens monetary transmission and maintains tight monetary policy conditions.
In December 2022 as previously announced, the MNB will ensure the efficiency of monetary transmission through additional instruments as well, namely foreign exchange swap tenders providing euro liquidity and discount bill auctions.