FRANKFURT (MNI) – The European Central Bank on Tuesday drained
E219.5 billion from the banking system in a seven-day
liquidity-absorbing operation intended to sterilize the ECB’s purchases
of Eurozone government bonds.
The amount drained matched the total accumulated volume of
government bonds purchased and settled by the ECB since the start of its
bond-buying program in May 2010.
There were 91 bids totaling E372.2433 billion, the ECB said. The
weighted average allotment rate for the operation was 0.27%, the lowest
rate was 0.25%, and the highest rate accepted, or the marginal rate, was
0.27%.
The drained liquidity takes the form of fixed-term deposits. These
can be used as collateral in the Eurosystem’s refinancing operations.
The central bank will hold another liquidity-absorbing operation next
week to reabsorb this week’s term deposits when they expire, as well as
any additional amounts that might be injected into the financial system
in the event of new bond purchases.
— Frankfurt bureau: +49 69 720 142; email: frankfurt@marketnews.com —
[TOPICS: M$$CR$,M$X$$$,M$XDS$,MN$MM$,M$$EC$]
