Forint liquidity in the banking sector declined in May, the National Bank of Hungary (NBH) said on the basis of its balance sheet data. Overnight and other deposits of banks at the NBH declined during the month, in our opinion also reflecting the carry-over effect from the NBH reduction of excess liquidity in the previous month. The average stock of forint-liquidity swaps of the NBH amounted to HUF 1,776.2bn in May and dropped by 8.1% m/m. Banks’ current account deposits at the NBH rose slightly m/m, partly on account of higher excess reserves. Excess reserves amounted to HUF 50.7bn on average during the month. The total reserve requirement of the banking sector represented HUF 226.3bn.
The average stock of the NBH external assets amounted to HUF 9,310.4bn in May. It was practically unchanged, falling by just 0.1% m/m. This was due to the reduction of the forint-liquidity swap portfolio, which was partly offset by revaluation effects from the weakening of the forint, the NBH explained.