The external assets of the National Bank of Hungary (NBH) amounted to HUF8,369.8bn on average in January and increased by 1.1% m/m, NBH balance sheet data showed. External assets rose both as an average stock and as an end-month level, which was due to EU fund transfers during the month, the NBH explained. On the other hand, the stock of forint liquidity swaps declined, which had a negative effect on forex reserves. The appreciation of the forint exchange rate also reduced the reserves’ level in HUF terms, the NBH said.
Forint liquidity of the banking sector increased in January, reflected in significant increase in banks’ overnight deposits in the NBH. The average stock of the three-month deposit, the main monetary policy instrument, fell slightly to HUF894.3bn in January. The three-month deposit stock should decline further in the next months as the MPC reduced the limit on the deposit stock from HUF 900bn for end-Q4/2016 to HUF700bn at end-Q1. Excess reserves of banks were HUF6.8bn or around the normal level. The total reserve requirement amounted to HUF177.8bn for the month.