Hungary to End 2-Week Facility in Unconventional Easing Push
- Central bank to eliminate 2-week facility by end of April
- Authority to boost swap auctions to help debt demand
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Hungary’s central bank will gradually phase out its two-week deposit facility after 17 years to ease monetary conditions and help reduce the country’s external vulnerability by channeling lenders’ liquidity toward the debt market.
The National Bank of Hungary will gradually cut amounts allotted at two-week deposit auctions from April 1, with the target of reducing the current 1 trillion forint ($3.4 billion) kept in the facility to zero by May, the central bank said in a statement Tuesday. The monetary authority is looking to prompt local banks to increase their purchases of government securities by as much as 800 billion forint by the end of April, Deputy Governor Marton Nagy told reporters in Budapest.