The National Bank of Hungary (NBH) will consider further steps to reduce long-term yields if necessary, NBH deputy governor Marton Nagy said quoted by the news portal Napi. The NBH will intervene quickly with both new and old instruments possible, he said. As we reported, the MPC cut the overnight deposit rate by 10bps to -0.15%, reduced the three-month deposit ceiling to HUF 75bn and committed to increasing the volume of forint liquidity swaps.
Nagy said that the BUBOR was at a historically low level and can be expected to decline further after yesterday’s additional unorthodox easing by the MPC. Long-term yields, however, have been less responsive to the unorthodox easing, Nagy noted, reiterating that the planned increase of the swap volume aimed to ensure a quicker pass-through of the monetary easing to the three- and five-year yields. Yesterday’s MPC decision to reduce the three-month deposit cap was the end of the ceiling cut cycle, Nagy also repeated.