Liquidity management operations at the National Bank of Hungary

Judit Antal (), Gyula Barabás (), Tamás Czeti () and Klára Major
Additional contact information
Judit Antal: Magyar Nemzeti Bank
Gyula Barabás: Magyar Nemzeti Bank
Tamás Czeti: Magyar Nemzeti Bank
Klára Major: Magyar Nemzeti Bank

No 2001/9, MNB Occasional Papers from Magyar Nemzeti Bank (Central Bank of Hungary)

Abstract: Central banks’ liquidity management plays a crucial role in the implementation of monetary policy. In most countries central banks influence short term interest rates through determining the equilibrium conditions of supply and demand in the market for bank reserves (liquidity). This article describes the liquidity management practice of the National Bank of Hungary in the period of 1998-2001. This period is characterized by two particular circumstances. First, there is a substantial liquidity surplus, therefore the Bank influences market interest rates using the liabilities side instruments of its balance sheet. Second, as a result of the narrow-band exchange rate regime and the fact that the Treasury Account is held with the Bank, the amount of liquidity is highly volatile and hard to forecast. The article explains how the Bank forecasts liquidity and the movements of overnight interest rate in these circumstances, and it describes the development of monetary policy instruments applied by the bank.

Keywords: monetary policy instruments; central bank liquidity management; interbank markets. (search for similar items in EconPapers)
JEL-codes: E52 E58 (search for similar items in EconPapers)
Pages: 60 pages
Date: 2001
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.mnb.hu/letoltes/op2001-9.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mnb:opaper:2001/9

Access Statistics for this paper

More papers in MNB Occasional Papers from Magyar Nemzeti Bank (Central Bank of Hungary) Contact information at EDIRC.
Bibliographic data for series maintained by Lorant Kaszab ( this e-mail address is bad, please contact ).