Hungarian central bank tweaks mortgage bond purchase scheme
- The National Bank of Hungary, which has also been actively buying government bonds at weekly tenders from banks.
- During the period from May 2020, mortgage bonds meeting the eligibility criteria for inclusion in the programme were issued to the tune of nearly HUF 250 billion.
BUDAPEST: The Hungarian central bank will stop purchasing mortgage bonds on the primary market from Nov. 16 as it prepares to launch a programme to start buying mortgage bonds qualifying for green bond status, the bank said on Tuesday.
The National Bank of Hungary, which has also been actively buying government bonds at weekly tenders from banks, said it would continue its mortgage bond purchases in the secondary market "to maintain the liquidity of the mortgage bond market".
The NBH relaunched its mortgage bond purchase programme in May in order to increase the banking sector's access to long-term funding amid the coronavirus pandemic.
"During the period from May 2020, mortgage bonds meeting the eligibility criteria for inclusion in the programme were issued to the tune of nearly HUF 250 billion," the central bank said.
The bank said its monetary policy instruments had since been expanded with other schemes to provide long-term funding, primarily long-term credit facilities for banks.
This makes it "possible to further improve the mortgage bond purchase programme and to make it more targeted", the NBH said.
The central bank will start talks with the Hungarian Banking Association and mortgage banks on the operative details of green mortgage bond purchases and the criteria for green bond status.