ECB bond purchases have slowed markedly, data shows

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The European Central Bank has decreased its purchases of eurozone government bonds, data released on Tuesday showed.

ECB figures indicated that it spent one billion euros (1.27 billion dollars) last week to buy government debt under a controversial programme that has divided central bank policymakers.

In each of the preceeding three weeks, the ECB had bought roughly four billion euros' worth of sovereign bonds on secondary markets, that is, not directly from governments.

The biggest purchases in a single week saw the ECB buy 16.5 billion euros in debt to restore calm on a key financial market.

ECB president Jean-Claude Trichet has stressed that the bond purchase programme is temporary and would be wound up as soon as market conditions allowed.

The central bank is not supposed to buy such debt because it could amount to financing public deficits, but it has been forced to do so until governments gain access to other sources of funds under a European Union finance plan.

The decline in purchases "should not be taken as a sign of an end to the ECB programme anytime soon," however, Commerzbank economist Michael Schubert told AFP.

© 2010 AFP

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