Overnight standing facilities
The NBH adopts several instruments for decreasing the volatility of overnight rates. To prevent extreme fluctuations of the interbank rates the central bank maintains an overnight interest rate corridor. The interest rate corridor is symmetric around the policy rate, it is the policy rate +/-1 per cent.
- At the top of the interest rate corridor the central bank meets without quantity limits the temporary liquidity needs of the commercial banks with its overnight collateralized loan. As a result of this the interbank interest rates can not rise above the interest rate ceiling.
- The rate on the overnight central bank deposit represents the bottom of the interest rate corridor. As the NBH is willing to tie down excess liquidity in the banking sector at this rate without limitation the interbank interest rates cannot sink below this level.
Interest rate of overnight standing facilities
HUFONIA
Volume of overnight standing facilities
BUBOR (Budapest Interbank Offer Rate) fixings