(Adds detail, more comments)
BUDAPEST Oct 7 Hungary's central bank, aiming
to ease monetary conditions by non-conventional means, will
introduce two new measures to better manage liquidity in the
local interbank market, two of its economists wrote on Friday.
When needed, the bank will use forint swaps for the first
time to inject forints into the market, and establish a one-week
deposit facility, to be activated when there is an excess of
The new tools could help the central bank ease monetary
conditions, Pal Kolozsi and Mihaly Hoffmann said in an article
on website Portfolio.hu.
Last month, it said it would keep its base rate at 0.9
percent, also announcing a cap on its main 3-month deposit rate
as it seeks to encourage commercial banks to lend and buy
government debt, rather than park excess cash with the central
The new one-week deposit facility will pay an interest rate
equal to the base rate, and the forint swaps will run over
one-week, one-month and three-month terms.
The deposit cap is expected to cause fluctuations in market
liquidity, in response to which the new fine-tuning tools will
be used on a case-by-case basis, the economists said.
They did not say when the tools would be used for the first
(Reporting by Sandor Peto and Krisztina Than; editing by John