Magyar Nemzeti Bank extends euro liquidity providing repo line with the European Central Bank

Budapest, 15 december 2022. The European Central Bank (ECB) and the Magyar Nemzeti Bank (MNB) set up a repo line agreement in July 2020 to provide euro liquidity to Hungarian financial institutions in order to address potential foreign exchange liquidity needs during market turbulances resulting from COVID-19 pandemic. The agreement was extended in February 2021 and again in March 2022. Given the financial market tensions caused by the protracted Russian-Ukrainian war, at the initiative of the MNB, the ECB decided on 15 December 2022 to extend the repo facility until mid-January 2024.

The MNB welcomes the extension of the agreement, so that the safety net provided by the ECB among others remains available to provide euro liquidity to Hungarian financial institutions if needed in the current turbulent financial market environment, thereby strengthening monetary transmission and financial stability. Under the extended agreement between the MNB and the ECB, the central bank will be able to borrow up to €4 billion.

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.