Magyar Nemzeti Bank extends euro liquidity providing repo line with the European Central Bank

Budapest, 29 January 2024. The European Central Bank (ECB) and the Magyar Nemzeti Bank (MNB) set up a repo line agreement in July 2020 to provide euro liquidity for Hungarian financial institutions in order to address potential foreign exchange liquidity needs during market turbulences resulting from the coronavirus pandemic. The agreement was extended several times, recently in December 2022 due to the financial market tensions caused by the protracted Russian-Ukrainian war. At the initiative of the MNB, in January 2024, the ECB decided to extend the repo facility until the end of January 2025.

The MNB welcomes the extension of the agreement, so that the safety net provided by the ECB among others remains available in the current turbulent financial market environment due to heightened geopolitical risks. The agreement supports the central bank to provide euro liquidity to Hungarian financial institutions if needed, thereby strengthening monetary transmission and financial stability. Under the extended agreement between the MNB and the ECB, the central bank will be able to borrow up to 4 billion euros.

Vissza a tetejére

The primary objective of the MNB shall be to achieve and maintain price stability. (...) Without prejudice to its primary objective, the MNB shall support the maintenance of the stability of the system of financial intermediation, the enhancement of its resilience, its sustainable contribution to economic growth; furthermore, the MNB shall support the government’s economic policy and its policy related to environmental sustainability, using instruments at its disposal.