September 20, 2016 / 1:16 PM / 3 years ago

Hungarian central bank to cap 3-month deposits at 900 bln forints

BUDAPEST, Sept 20 (Reuters) - Hungary’s central bank will cap funds placed by commercial banks in its main 3-month deposit tool at 900 billion forints ($3.26 billion) at the end of this year, squeezing out at least 200 to 400 billion forints from the facility, the bank said on Tuesday.

“While the NBH will strive to allocate the volumes offered at each tender evenly, it reserves the right to deviate from this in function of liquidity developments,” the bank said in a statement, after a meeting of its Monetary Council.

“The purpose of today’s decision is to stimulate the interbank market further and to facilitate the targeted easing of monetary conditions by way of unconventional instruments.”

The bank left its main base rate on hold at 0.9 percent as expected. ($1 = 276.40 forints) (Reporting by Krisztina Than and Gergely Szakacs)

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