FRANKFURT (MNI) – The European Central Bank on Thursday allotted
E29.4432 billion in its widely anticipated six-day fine tuning
operation, considerably higher than expected.
The liquidity was provided at a fixed rate of 1.00% and on a full
allotment basis — the ECB satisfied all of the 50 bids received.
Along with Wednesday’s allotment of E104 billion in three-month
LTROs, today’s operation brings the total allotment in the two
operations to E133.4 billion — representing a 59% roll-over of the
total E225 billion in three-, six-, and 12-month funds expiring today.
That is lower than what some analysts had expected and could mean a
larger reduction in excess liquidity in the banking system, which is
likely to push up short-term market interest rates.
Indeed, the three-month EONIA spiked sharply in the wake of today’s
ECB operation to 0.6385% from 0.5905% before the operation.
— Frankfurt bureau: +49-69-720-142. Email: frankfurt@marketnews.com
[TOPICS: MGX$$$,M$$FX$,M$X$$$,M$G$$$,M$$EC$]
