ECB and Magyar Nemzeti Bank set up repo line to provide euro liquidity

ECB and Magyar Nemzeti Bank set up repo line
Repo line to remain in place until June 2021, unless an extension is decided
Size of repo line set at €4 billion

The European Central Bank (ECB) and the Magyar Nemzeti Bank (MNB) have agreed to set up a repo line arrangement to provide euro liquidity to Hungarian financial institutions to address possible euro liquidity needs in the presence of market dysfunctions due to the COVID-19 shock.

Under a repo line, the ECB provides euro liquidity to a non-euro area central bank in exchange for adequate euro-denominated collateral.

Under the repo line, the MNB will be able to borrow up to €4 billion from the ECB. The maximum maturity of each drawing will be three months. The repo arrangement will remain in place until the end of June 2021, unless an extension is decided.

Vissza a tetejére

The primary objective of the MNB shall be to achieve and maintain price stability. (...) Without prejudice to its primary objective, the MNB shall support the maintenance of the stability of the system of financial intermediation, the enhancement of its resilience, its sustainable contribution to economic growth; furthermore, the MNB shall support the government’s economic policy and its policy related to environmental sustainability, using instruments at its disposal.