FRANKFURT (MNI) – The European Central Bank Tuesday drained E209.0
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 drained comes after the ECB on Monday said it allowed
2.517 billion in bonds to mature last week, bringing the cumulative
total still on its balance sheet down from E211.5 billion to E208.5
billion.
The drain Tuesday suggest the ECB may have alloted slightly more
than originally planned in today’s operation, however the ECB earlier
Tuesday rounded up its cumulative balance — and thus the intended
allotment — to 209.0 billion, changing the orginal Monday release.
Fifty-six banks placed bids totaling E452.9041 billion, the ECB
said. The weighted average allotment rate for the operation was 0.01%;
the lowest rate was 0.0%, and the highest rate accepted, or the marginal
rate, was 0.01%, 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@mni-news.com —
[TOPICS: M$$CR$,M$X$$$,M$XDS$,MN$MM$,M$$EC$]
