Economy 19 October 2022, 3:53pm

Hungary central bank one-day deposit quick tender breaks record

Portfolio

Hungarian banks have offered HUF 1,549.22 billion worth of deposits at an interest of 18% in the central bank's one-day deposit quick tender on Tuesday, which were accepted in full, the central bank reported. This is the largest sum accepted in the brief history of the one-day deposit tenders.

The offered and accepted bids were HUF 1,201.2 bn on Monday, HUF 752.94 bn on Saturday (which was a working day), and HUF 994.79 bn on the first such tender last Friday when the MNB announced a 500-basis-point rate hike, as the interest at its tender the preceding day was still 13.0%. The drastic rate hike was necessitated by the forint slumping to all-time lows against both the euro and the dollar.

Another emergency measure was to ditch the one-week deposit tender from the toolkit as of Monday, and now the MNB uses only the one-day deposit tenders to absorb liquidity.

MNB Deputy Governor Barnabás Virág announced on 14 October several measures to stabilise the money market and prop up the ailing forint, including the securing of foreign exchange requirements for energy imports until the end of the year. Read our articles on the matter below: