FRANKFURT (MNI) – The European Central Bank Tuesday once again fell
short of its target in the one-week liquidity-absorbing operation
intended to sterilize the ECB’s purchases of Eurozone government bonds,
the bank said on Tuesday.
Draining only E62.1772 billion from the system compared with an
intended E76.0 billion, today’s E13.8228-billion shortfall overshadowed
that of last week, when the central bank removed E71.403 versus a
targeted E76 billion.
Fifty-eight banks placed bids for today’s liquidity-draining op,
totaling E62.1772 billion, the ECB said.
The weighted average allotment rate for today’s operation was
1.16%, the lowest rate was 1.04%, and the highest rate the ECB was
willing to pay, or the marginal rate, was 1.25%, the central bank
reported.
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: MGX$$$,M$$FX$,M$X$$$,M$G$$$,M$$EC$]
