ECB buys just nine million euros in public debt
The European Central Bank cut bond purchases by more than 99 percent last week to nine million euros (12.5 million dollars), an ECB statement said Monday, a sign of calmer conditions in public debt markets.
ECB purchases of sovereign debt the previous week had leapt to 1.384 billion euros, tens times more than the week prior to that, with markets noting a focus on Irish bonds that were downgraded by Moody's Investors Service.
The central bank's Securities Markets Programme is officially aimed at ensuring that ECB monetary policy is effectively transmitted to markets by buying bonds from commercial banks to curb distortions in interbank transactions.
An amount equal to the purchases is taken in by the ECB in one-week deposits from commercial banks to ensure the central bank does not fuel inflation by adding to the overall money supply.
The insignificant amount of nine million euros recorded last week brought ECB purchases back to levels seen in early August when some speculated the programme might soon be discontinued.
In the weeks immediately after the programme was launched in May, weekly ECB purchases of government debt reached a high of 16.5 billion euros.
© 2010 AFP