October 31, 2017 / 6:51 AM / a year ago

Hungary cbank extends BUBOR quotation to 6-month tenor

BUDAPEST, Oct 31 (Reuters) - Hungary’s central bank will extend mandatory quotation on the Budapest Interbank Offered Rate (BUBOR), the most closely watched short-term money market interest rate, to the 6-month tenor for commercial banks from January 2, it said on Tuesday.

“In addition to declining activity, the reaction of longer term BUBOR fixings to market events was slower and less significant than in the case of other indicators,” it said in a statement.

“Furthermore, there is no activity in the longer segment of the market, which may impair the effectiveness of monetary transmission across the longer segments of the yield curve.”

Last week, Central Europe’s most dovish central bank left interest rates on hold at record lows but said it was ready to ease monetary conditions further.

It has also mulled action to curb yields on longer-dated government bonds to compress borrowing costs across the economy. (Reporting by Gergely Szakacs and Krisztina Than)

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