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 was unchanged versus last week’s drain total, given that
the ECB purchased E146 million in new bonds last week and that the bank
rounds to the nearest half billion.
There were bids from 58 banks totaling E88.824 billion at Tuesday’s
draining operation, the ECB said.
The weighted average allotment rate for today’s operation was
0.89%, the lowest rate was 0.4%, and the highest rate accepted, or the
marginal rate, was 0.99%, 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$]
