FRANKFURT (MNI) – The European Central Bank said Monday it
continued to buy Eurozone government bonds last week although its
interventions were more limited than in the previous week.
The ECB said that E369 million SMP transactions were settled in the
week ending February 25. In the previous week the central bank had
bought E711 million, ending three weeks on the sidelines.
The action comes amid renewed tensions on peripheral markets,
especially in Portugal, with the benchmark 10-year bond reaching almost
7.6% on Monday.
There has been increasing talk that Portugal will need to ask for
help from the European bail-out fund EFSF.
With the ECB’s purchases, the total amount of bond buys to be
drained has risen to E77.5 billion. The 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$]
