FRANKFURT (MNI) – The European Central Bank on Tuesday called for
bids in a one-week liquidity absorbing operation designed to sterilize
the money that the bank had injected into the financial system through
its purchases of bonds on the secondary market.
The operation is in the form of a variable-rate tender with a
maximum bid rate of 1.00%, the bank said. It intends to mop up E26.5
billion in liquidity, corresponding to the amount of purchases under the
Securities and Market Programme that was settled by Friday 21 May.
Bids are due by 12:05 CET.
The liquidity will be held for one week at the bank as a term
deposit. These fixed-term deposits can be used as collateral for the
Eurosystem’s credit operations, the bank said. The number of bids is
restricted to two per counterparty, the bank said. The ECB will conduct
another liquidity-absorbing operation next week, it said.
–Frankfurt bureau; +49-69-720142; frankfurt@marketnews.com
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