BUDAPEST, March 29 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)