LONDON (MNI) – Cover at the Bank of England’s first over 15 year
reverse Gilt auction was strong, coming in at 2.46.
The BOE saw some low cover ratios when its longest dated purchase
basket was over 25 years, but Tuesday’s auction showed no such problems
for the over 15 year basket.
Following the announcement that the Monetary Policy Committee
sanctioned a further Stg50 billion of quantitative easing at its
February meeting, the BOE said it would continue to purchase Gilts with
a residual maturity over 3 years but changed the baskets.
The new purchase baskets for the thrice weekly auctions are 3 to 7
years, 7 to 15 years and over 15 years, replacing the previous 3 to 10
year, 10 to 25 year and over 25-year baskets.
“This operational change is intended to help reduce the risk of
undesirable frictions in the functioning of the Gilt market,” the BOE
said.
–London newsroom 0044 20 7862 7491; email: drobinson@marketnews.com
[TOPICS: M$$BE$]
