BUDAPEST, March 29 (Reuters) - Hungary’s central bank lowered the cap on its main 3-month deposit facility to 500 billion forints ($1.74 billion) by the end of June to maintain the current loose monetary conditions, Deputy Governor Marton Nagy said on Wednesday.
“The Monetary Council statement said the goal was to maintain the current loose monetary conditions,” Nagy told Reuters on the sidelines of the World Exchange Congress.
“This could be achieved by maintaining the level of liquidity that has been squeezed out so far,” he said.
“Maintaining that level required the cap to be lowered to 500 billion forints, because liquidity in the banking system will decline notwithstanding.”
Market participants had expected the cap to be lowered to just 600 billion forints from 750 billion at the end of this month, however, Nagy said those estimates probably did not take all factors affecting market liquidity into account. ($1 = 286.77 forints) (Reporting by Gergely Szakacs)