The HUF-liquidity swap portfolio of the National Bank of Hungary (NBH) remained unchanged after the usual weekly tender, the NBH announced. The NBH provided HUF2.9bn of one-, three-, six- and twelve-month swaps on the tender. The portfolio will amount to HUF1,704bn, unchanged for the third straight week. It will consist of HUF29.6bn of one-month, HUF173.9bn of three-month, HUF501.5bn of six-month and HUF996.5bn of twelve-month swaps.
As we reported, the NBH published a special media article, clarifying that the change in the swap stock alone was not indicative of the direction of monetary policy. The swap liquidity provided by the NBH worked together with exogenous changes in bank liquidity to achieve the target degree of liquidity crowding-out, the NBH stressed. Accordingly, the swap stock might even increase in H2, despite that the MPC has decided on HUF100bn reduction in crowding-out liquidity for Q3, due to expected strong decline in bank liquidity, the NBH warned.