FRANKFURT (MNI) – The European Central Bank announced Wednesday
that it allotted E131.93319 billion in a three-month long-term
refinancing operation (LTRO).
The bank received 171 bids for the operation, which was carried out
at a 1% fixed rate and with full allotment.
The amount was below analysts’ expectations of volume between
E150-250 billion. Banks are in need of liquidity because the ECB’s
one-year liquidity operation from last June expires tomorrow, meaning
that E442 billion is leaving the financial system.
Experts had said that the full amount of last year’s 1-year
operation would not be rolled over into today’s three-month money
because some of the 1-year money borrowed last year was used for
arbitrage purposes that are currently not possible at the three-month
maturity.
The ECB will also hold a 6-day refinancing operation on Thursday to
help bridge the expiration of the 1-year funds.
Today’s operation settles July 1 and expires September 30.
–Frankfurt bureau; +49-69-720142; frankfurt@marketnews.com
[TOPICS: M$X$$$,M$$EC$,MGX$$$]
