June 19, 2019 / 1:00 PM / a month ago

Hungary cbank holds extraordinary fx swap tender to ease liquidity shortage

BUDAPEST, June 19 (Reuters) - Hungary’s central bank has provided 463 million euros ($518.84 million) worth of forint liquidity to banks via an extraordinary one-week fx swap tender on Wednesday to ease a temporary liquidity shortage, the National Bank of Hungary (NBH) said.

Liquidity has dropped in the banking system due to a corporate VAT tax payment due this week and a new retail government bond that was snapped up by households, pushing up interbank rates.

“The one-week swap facility ensures that liquidity processes remain balanced until its maturity next Wednesday and it can also dampen an increase in short-term market rates,” the NBH said in a statement.

According to Reuters page the National Bank of Hungary (NBH) offered 308 million euros worth of swaps at the tender, and received bids worth 1.337 billion euros from banks. The NBH accepted bids worth 463 million euros. ($1 = 0.8924 euros) (Reporting by Krisztina Than and Gergely Szakacs)

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