ECB government bond purchases close to zero: data

9th August 2010, Comments 0 comments

The European Central Bank said Monday it had bought very few government bonds last week, a sign that a key eurozone financial market is stabilising.

The ECB purchased just nine million euros (12 million dollars), continuing a downward trend since its controversial programme aimed at supporting financial markets began in May.

Bond purchases the week before amounted to 81 million euros, which was already down sharply from 176 million euros the week prior to that.

When the ECB began its Securities Markets Programme, it bought more than 26 billion euros worth of bonds in the first two weeks, mainly those issued by Greece, Ireland, Portugal and Spain.

The ECB offsets such public bond purchases by taking in an equal amount of one-week deposits from commercial banks so the operations do not increase the amount of money in circulation, which could fuel inflation.

© 2010 AFP

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