FRANKFURT (MNI) – The European Central Bank Tuesday will reabsorb
E59 billion in cumulative purchases of government bonds via a quick
tender to collect one-week term deposits, the central bank announced
Monday.
The operation, to be conducted on Tuesday at 9:30 GMT, will be in
the form of a variable-rate tender with a maximum bid rate of 1.00%, the
bank said.
The ECB intends to mop up E59 billion in liquidity, equivalent to
the amount of bonds purchased through the Securities Market Program and
settled as of last Friday, it said.
The liquidity will be held for one week at the bank as a term
deposit. These fixed-term deposits can be used as collateral for the
Eurosystem’s credit operations, the bank said.
Last week, the bank failed in its effort to mop up E55.0 billion in
bond buys, only collecting E31.87 billion. Today’s announcement means
that the net change in bonds settled under the Securities Markets
Program is +E4 billion.
The ECB said it will conduct another liquidity-absorbing operation
next week.
— Frankfurt bureau: +49 69 720 142; email: frankfurt@marketnews.com —
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