The HNB did not allocate any funds in its regular weekly repo auction today, as banks did not demand additional short-term liquidity, the central bank reported. The banks demanded short-term liquidity for the last time in mid-December 2017 as the liquidity in the banking system is high and, as some local analysts had pointed out, the cost of this type of source of liquid funds is relatively high. Despite the announced stronger interest in post-high-season tourism, banks seem to have been able to meet the demand for local currency so far. Note that even during the high tourism season in July and August, banks have not sought additional short-term liquidity from the HNB, as it was in 2018.
The HNB has been carrying out weekly repo auctions since September 2015 following the necessity of short-term liquidity injections in the banking system over the newly adopted CHF-loan conversion legislation. Banks’ interest in the auctions was higher in the first months in 2015, but it gradually faded over the next years and was zero in both 2018 and so far in 2019.