Seven banks decided to participate in the FX swap transaction with a total value of EUR 2.81 billion
On 5 February 2009, the Magyar Nemzeti Bank introduced a new, longer-term swap facility, with a deadline of 25 February for domestic commercial banks to participate. Seven banks indicated their willingness to make use of the Bank’s new facility before the deadline, with a total transaction value of EUR 2.81 billion. The facility is available for banks as of today.
In the changed global financial environment, foreign funding available for banks has become scarce, which would lead to a sudden drop in the credit supply and ultimately to a sharp decline in economic performance. In order to facilitate the adjustment, the Bank has introduced a six-month EUR/HUF swap facility. One of the conditions is that participating credit institutions undertake to maintain their loans outstanding to the domestic corporate sector at least at end-2008 levels throughout 2009.
By introducing the new facility, the Bank’s aim is to further reduce present uncertainties arising from occasional liquidity shortage in the Hungarian money market and to alleviate recent strains in corporate lending.