FRANKFURT (MNI) – The European Central Bank drastically cut its
purchases of sovereign EMU debt last week, the central bank announced
Monday.
The bank said it purchased E146 million worth of bonds through last
Friday. The amount was down sharply from the E2.313 billion it had
purchased the previous week.
The results come after tensions in the Eurozone’s peripheral bond
markets have calmed considerably in recent weeks. Portugal’s successful
bond auction earlier in the month has made it seem plausible, although
far from certain, that the embattled country can finance itself without
resorting to the European Financial Stability Facility.
The ECB’s bond purchases made over the past week, minus E87 million
in previously purchased securities that have now matured, leaves the
total amount of bond buys to be drained at E76.5 billion, the same as
last week’s total. ECB will drain that amount in a quick tender to
collect one-week term deposits.
The operation, to be conducted on Tuesday at 10:30 GMT, will be in
the form of a variable-rate tender with a maximum bid rate of 1.00%, the
bank said. The liquidity will be held for one week at the bank as a term
deposit. The fixed-term deposits can be used as collateral in the
Eurosystem’s credit operations.
The central bank also said it intends to hold another
liquidity-absorbing operation next week.
— Frankfurt bureau: +49 69 720 142; email: frankfurt@marketnews.com —
[TOPICS: MGX$$$,M$X$$$,M$$EC$]
