According to Reuters, citing unnamed sources
- This is to maintain portfolio duration
- Minor deviations from capital key may be tolerated during reinvestments but big deviation is not seen to be needed
It is said that policymakers in the central bank are wary that long-term yields may creep back up so the ECB is considering more longer-dated bonds to avoid such an instance from taking place.
The Reuters report said that this was not discussed in the ECB meeting in June though, it's more of a general thought ahead of the July or September meeting.
I believe the ECB will start to focus more on interest rates moving forward, so reinvestments and asset purchases are going to take a bit of back seat when it comes to borrowing costs - but it's always good to be in the know just in case. Either way, there isn't much details offered here and there isn't any confirmation either that the ECB will go through with this just yet. Let's wait and see.
