April 25, 2014 / 3:01 PM / 4 years ago

UPDATE 1-Erste, RBI see limited impact from Hungarian bank move

* Erste sees no direct influence on strategy at moment

* RBI sees no significant impact on position

* Analyst says cenbank move will put more pressure on forint (Adds comment from Raiffeisen, analyst, background)

VIENNA, April 25 (Reuters) - Austria’s Erste Group and Raiffeisen Bank International said they did not foresee immediate significant impact from the Hungarian central bank’s plan to stop issuing two-week bills in August.

Hungary’s central bank has taken action to push commercial banks to buy more local-currency government bonds in an attempt to reduce the country’s high reliance on foreign financing.

“We see no direct influence on our strategy in Hungary for the time being,” a spokeswoman for Erste said on Friday, adding that Erste would seek talks with the Hungarian central bank to clarify the situation.

An RBI spokeswoman said: “The change in monetary policy instruments of MNB (Magyar Nemzeti Bank) does not have a significant impact on the position of Raiffeisen Bank Hungary.”

The central bank said on Thursday that from Aug. 1 its two-week bills - its main tool for managing market liquidity - will be replaced with two-week deposits, where foreign players will not be able to park their funds, and which it won’t accept as collateral against loans.

This, the bank said, should encourage foreign banks and banks operating in Hungary to shift some 600 billion to 1 trillion forints ($4.5 billion) worth of funds from the two-week deposits into other assets, chiefly forint-denominated government debt.

If foreign banks withdraw their funds from the country instead of moving into Hungarian government debt, the forint - which eased after the central bank’s announcement on Thursday - could weaken further.

“The market worries are thoroughly well-founded. In the end, the measure serves above all to support the Hungarian treasury, to the detriment of the currency,” Commerzbank foreign exchange analyst Thu Lan Nguyen wrote in a note. (Reporting by Angelika Gruber; Writing by Georgina Prodhan; Editing by Erica Billingham and Jane Merriman)

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