FRANKFURT (MNI) – The European Central Bank on Tuesday drained
E76.5 billion from the financial system in its weekly operation to
sterilize purchases of Eurozone government bonds, data released by the
bank showed.
Last week, the ECB resumed bond purchases after three weeks on the
sidelines. It purchased E432 million in government bonds last week, but
E1.054 billion matured over the same time frame. This brought down the
total to be drained today to E76.5 billion from last week’s E77.5
billion.
There were bids from 58 banks totaling E77.32030 billion at
Tuesday’s draining operation, the ECB said.
The weighted average allotment rate for today’s operation was
0.72%, the lowest rate was 0.50%, and the highest rate accepted, or the
marginal rate, was 1.00%, 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; +49-69-720142; frankfurt@marketnews.com
[TOPICS: MGX$$$,M$$FX$,M$X$$$,M$$EC$]
