Budapest, May 26, 2023 The Monetary Council of Magyar Nemzeti Bank (MNB) decided on the following technical amendments to the required reserve system:
a) The MNB, instead of using only turn dates’ balance sheets to calculate reserve requirements, will undertake a transition to a monthly average calculation basis from daily balance sheet items subject to reserve requirements by every obliged credit institution.
b) During the period required for the transition, i.e. from the maintenance period of July 2023 until withdrawal (planned by the end of this year), the calculation basis of reserve requirements is determined by the statistical balance sheet as of 31 March 2023, thus the reserve base remains unchanged during this provisory period.
c) From 1 July 2023 onwards, an additional way to comply with reserve requirements becomes available in the form of the term deposit instrument with at least 14-day original maturity. Compliance is available up to 15 per cent of the daily minimum reserve requirement for each bank. Accordingly, the MNB will continue to hold long term deposit tenders on a regular basis.
As a consequence of the modifications, the concerned MNB decrees related to the minimum reserve requirement will be amended and published, of which the MNB is going to inform the obliged credit institutions. The MNB held continuous consultations with the Hungarian Banking Association on the experiences of the required reserve system and the technical amendments affecting it.