FRANKFURT (MNI) – The European Central Bank Monday drained
E194.1986 billion from the banking system in a seven-day
liquidity-absorbing operation intended to sterilize the ECB’s purchases
of Eurozone government bonds.
The amount, however, fell short of the E203.5 billion targeted and
spent by the ECB in bond buys since the start of the program in May last
year.
Eighty five banks placed bids totalling E194.1986 billion, the ECB
said. The weighted average allotment rate for the operation was 0.62%,
the lowest rate was 0.5%, and the highest rate accepted, or the marginal
rate, was 1.25%, the ECB 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: M$$CR$,M$X$$$,M$XDS$,MN$MM$,M$$EC$]
