MNB adds FX swap tender in June
The National Bank of Hungary (MNB) on Friday said it will hold a two-week FX swap tender providing euro liquidity on June 21, bringing the total number of its end-of-quarter FX swap tenders to five, according to a report by state news wire MTI.
"In order to ensure the effectiveness of monetary transmission, it is necessary that the FX swap market yields follow the interest rate of the one-week deposit facility as rapidly as possible," MNB said, explaining the decision to supplement the four earlier announced FX swap tenders.
MNB raised the rate on its one-week deposit facility by 50 bp to 7.25% on Thursday.
In addition to the FX swap tender on June 21, MNB will hold tenders on June 7, 14, 29, and 30. Two discount bill auctions will also be held: on June 7 and 21.
The maturity date of the first swap as well as both discount bills will be July 1. The other FX swaps will mature on July 7.
The central bank started the practice of holding the end-of-quarter FX swap tenders in September 2020 to improve the effectiveness of monetary policy transmission. MNB policymakers decided to add short-term discount bills to the policy toolkit on a discretionary basis late in 2021.
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