Hungary central bank action ‘distorting’ swaps curve
The Central Bank of Hungary has offered up 1 trillion forint notional of cheap interest rate swaps, driving down bids for receiver swaps and government bond yields, say dealers
An ambitious stimulus package from the Central Bank of Hungary – which is offering local banks up to 1 trillion Hungarian forint ($3.6 billion) in cheap interest rate swaps in a bid to boost lending – is having a sizeable distortive effect on the forint interest rate swap curve, say dealers.
The central bank introduced its monetary policy initiative – dubbed the 'interest rate swap conditional on lending activity' (LIRS) programme – at the end of January, offering commercial banks three-year
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