ECB nearly doubles bond-buying

21st November 2011, Comments 0 comments

The European Central Bank said Monday it had nearly doubled its weekly purchases of eurozone bonds, as it continued its bid to drive down yields and fight the debt crisis that threatens to tip Europe into recession.

The ECB snapped up nearly eight billion euros ($10.7 billion) in bonds last week, compared to four billion euros the previous week.

The ECB, as usual, did not specify which government bonds it had bought.

But the bank has now bought a total 194.5 billion euros in eurozone government bonds since it first began the controversial operations early last year as part of efforts to ease debt strains in the 17-nation bloc.

It resumed major purchases in August when renewed strains pushed Italian and Spanish borrowing rates to unsustainable levels.

According to an unconfirmed report in Friday's Frankfurter Allgemeine Zeitung daily, the ECB has secretly set a 20-billion-euro limit on its weekly purchases of sovereign bonds.

Several European governments have put pressure on the ECB to step up its programme of buying bonds, seen by some as a possible solution to the debt crisis.

But the ECB, backed by Germany, has steadfastly refused, arguing that its sole responsibility is to keep eurozone prices stable.

© 2011 AFP

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