The Central Bank of Hungary extends the BUBOR mandatory quotation to the 6-month tenor for commercial banks.
The Central Bank’s benchmark fixing committee decided to modify the regulation of BUBOR, the Budapest Interbank Offered Rate.
The quotation of BUBOR was initiated in mid-2016 and after its introduction the interbank depo market turnover has increased. However, the trend has declined in the last months and longer term BUBOR fixings revealed to react more slowly to market events than in the cases of other indicators. Additionally, the potential of non-substantial activity in the longer segment of the market to impair the effectiveness of monetary transmission across the longer segments of the yield curve compelled the Central Bank of Hungary to make some adaptations.
From 2 January 2018 the following changes will take place:
- Extended BUBOR quotation from current 1 and 3-month to 6-month tenor
- Increased minimum transaction size for the one/three-month maturity (plus the introduction of the six-month maturity transaction size)
- Reduced fixed bid/ask spread from 15 to 10 basis points.
The Central Bank of Hungary said it does not exclude taking further steps if necessary.
Dario Mariotto
Relationship Manager
Global Securities Services Hungary
dario.mariotto@unicreditgroup.hu