Monetary tightening continues, with almost HUF 2,600 billion of liquidity now sterilized in MNB's long-term deposit

Budapest, Wednesday 12 October 2022. The Magyar Nemzeti Bank (MNB) has held its second tender for its variable-rate, long-term deposit instrument, accepting bids worth HUF 506 billion, now sterilizing almost HUF 2,600 billion of liquidity in the new instrument. With the long-term deposit tender, the MNB continued to absorb substantial amount of free liquidity and thus to tighten monetary policy.

During the 2-month variable-rate deposit tender on 12 October, 11 banks submitted bids totalling HUF 522 billion, of which the MNB accepted bids worth HUF 506 billion. The starting value date of the 2-month transaction is 13 October, while the maturity date is 1 December 2022, as in the previous week. The weighted average spread of the accepted bids was 1.36 percent, above the reference one-week deposit rate.

Today's tender also serves to absorb free banking system liquidity as the MNB continues its monetary tightening. Liquidity sterilized in long-term deposit instruments reached close to HUF 2,600 billion with today's tender.

In response to bank demand, the MNB will hold another liquidity-absorbing deposit tender next Wednesday. Thereafter, the central bank will normally hold a long-term deposit tender on the first Wednesday of each month, with a value date of Thursday, but additional tenders may be held in duly justified liquidity cases.

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.