NBH to launch floating-rate three-month FX swap tenders

The floating-price tenders will be operated once a week until withdrawal, and will provide euro liquidity up to a combined EUR 2.19bn or to the tune of the value left unused in the fixed-price six-month euro-forint swap tender the NBH started to operate on Monday. The NBH said Monday afternoon seven domestic banks opted to utilise the six-month FX swap facility up to EUR 2.81bn combined as against of a combined EUR 5bn set aside by the Bank for the purpose.
Unlike the six-month tender, where participants had to agree to certain conditions, the three-month tenders will be available to all domestic banks with a reserve obligation.
The NBH will specify a minimum implied yield (expressed in maximum swap points) for the floating-rate tenders. The minimum implied yield will exceed the implied yield of the fixed-rate FX swap tenders by at least 50 basis points.
Similar to the other euro-forint swap facilities, the NBH uses 110pc of the prevailing exchange rate as a technical rate for the swap transactions.
In a new development, starting March 9, the NBH will use net settlement with clients when calculating dues/obligations on the same value day from any of its euro-forint swap facilities.
The facility is in addition to the currently available three fixed-price facilities providing foreign currency liqquidity for forints: an O/N FX swap tender providing euro liquidity and available daily since last October, a one-week two swap tender, providing Swiss Franc liquidity, available once a week since the beginning of February, and the new six-month swap tender providing euro liquidity, also available once a week, from March 2.

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