The monthly average stock of two-week NBH bills rose HUF 260bn to HUF 2,907.5bn in July. At the end of July, the stock stood at HUF 2,998.3bn, up HUF 340.8bn from the previous month and accelerating somewhat from a HUF 330bn rise in June. At a rate setting meeting on July 27 the monetary council decided on a bigger-than-expected 100bp rate cut, which brought the base rate – the rate paid on the two-week bills – to 8.50pc. Nevertheless, banks bought more of the bills, placing a record HUF 1,785.8bn into the instrument on Wednesday to bring total stock to 3,488.8bn, HUF 532bn more than before the rate cut. The stock of current account deposits placed at the central bank by monetary and financial institutions exceeded the mandatory reserve obligation by a slight HUF 0.9bn and the monthly average level stood at HUF 340.9bn, a slight HUF 4.2bn down from June. The average stock of O/N deposits by monetary and financial institutions rose HUF 32.1bn to HUF 413.8bn, but the end-July level fell 43.3bn to HUF 785bn from a month earlier. The average level of central government deposits was HUF 1,233.5bn in July, down HUF 75.8bn from the average in June. Deposits at the end of the month grew HUF 443.5bn, including a HUF 14.9bn exchange rate loss, to HUF 1,467.7bn. Central budget deposits at the NBH hit a record HUF 2,020.1bn in January and included HUF 1,518.3bn in foreign currency. By the end of July, budget deposits were down by HUF 552.4bn as the result of a HUF 1,022.1bn drop in forex deposits and a HUF 469.7bn increase in forint deposits. As the result of a HUF 491.8bn rise in assets and a HUF 93.1bn fall in liabilities, net foreign assets of the central bank rose HUF 584.9bn in forint terms, including the effect of a net HUF 93.4bn exchange rate loss in July. NBH foreign assets reached HUF 8,044.6bn at the end of July, up HUF 1,460.4bn from the end of 2008 and almost the double the HUF 4,173.1bn twelve months earlier. (The forint-term figure includes the effect of a 15.2pc weakening of the forint since July 2008 and 0.6pc easing since December.)