The European Central Bank stepped up its sovereign bond purchases last week but the weekly amount purchased remained significantly lower than the volumes seen in the previous four months.
The ECB settled EUR462 million in government bonds on the secondary market last week, it said Monday, up from EUR19 million the previous week but less than the EUR22 billion to EUR2.2 billion since the ECB re-started the purchases in August to resolve market tensions, having spent 19 weeks on the sidelines.
Calls from politicians and analysts on the ECB have been mounting to come to the rescue of the debt-ridden Eurozone governments with increasing its bond purchases considerably and thus move closer to solving the European debt crisis.
The ECB, however, has firmly refused the calls. The ECB further said it will drain EUR211.5 billion Tuesday from the market at a variable-rate tender with a maximum bid rate of 1.00%. The tender is aimed at offsetting the potential inflation-boosting impact of the bond purchases.
EasyForexNews Research Team