FRANKFURT (MNI) – The European Central Bank Tuesday drained E76.5
billion from the financial system in its weekly operation to sterlize
purchases of Eurozone bonds, data released by the bank showed Tuesday.
The drained amount this week matched the total volume of government
bonds purchased by the ECB and settled as of last Friday. The total
drained amount increased by E2.5 billion versus last week’s drain total,
given that the ECB purchased E2.313 billion in new bonds last week and
that the bank rounds to the nearest half billion.
There were bids from 62 banks totaling E103.687 billion at
Tuesday’s draining operation, the ECB said.
The weighted average allotment rate for today’s operation was
0.69%, the lowest rate was 0.25%, and the highest rate accepted, or the
marginal rate, was 0.80%, 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 almost inevitable event of new bond purchases.
–Frankfurt bureau; +49-69-720142; frankfurt@marketnews.com
[TOPICS: MGX$$$,M$$FX$,M$X$$$,M$$EC$]
