FRANKFURT (MNI) – The European Central Bank on Monday called for
bids in a 8-day liquidity absorbing operation designed to sterilize
the money that the bank had injected into the financial system through
its purchases of bonds on the secondary market.
The operation is in the form of a variable-rate tender with a
maximum bid rate of 1.5%, the bank said.
With E4.0 billion in bond-buys having settled in the week ending
October 28, the bank intends to mop up E173.5 billion in liquidity.
The figure corresponds to the amount of purchases under the
Securities Market Programme that was settled at or before last Friday.
Bids for today’s operation are due by 12:05 CET.
The liquidity will be held for one week at the bank as a term
deposit. These fixed-term deposits can be used as collateral for the
Eurosystem’s credit operations, the bank said. The number of bids is
restricted to two per counterparty, the bank said.
— Frankfurt bureau: +49 69 720 142; email:frankfurt@marketnews.com —
[TOPICS: MT$$$$,M$$EC$,M$$FI$,M$X$$$,MGX$$$]
