The decline was primarily reflected in lower stock of three-month deposits at the NBH, which was in line with the ceiling imposed by the MPC. The end-December stock of the three-month deposit amounted to HUF75bn, equal to the ceiling. Overnight and other bank deposits at the NBH increased but not sufficiently to offset the reduction of the three-month deposit stock.
Banks’ excess reserves amounted to a relatively high HUF 3.8bn on average in December. We think that the increase in excess reserves should be usual for the end-year holiday season. The total reserve requirement for the banking sector amounted to HUF197.9bn for the month.
The average stock of the NBH external assets amounted to HUF7,858.9bn in December and increased by 2.0% m/m. The increase reflected forint depreciation and transfers received from the EU, the NBH said, confirming our assumptions about the factors for the increase in the international reserves during the month. The EU funds’ inflow also resulted in a slight increase in the central government’s deposits at the NBH – up by 5.3% m/m to HUF1,039.8bn.