THE EUROPEAN CENTRAL BANK opted against hoovering up the bonds of any of its member states last week – the first time it has not felt the need to intervene in markets in six months.
An ‘ad hoc’ communication issued by the bank yesterday said the bank had not bought any bonds between February 13 and 17, meaning its portfolio of foreign bonds remained valued at €219.5 billion.
The news marked the first time since August that the ECB has not considered it necessary to intervene in the markets, with the costs of borrowing for major eurozone members apparently staying within acceptable limits.
The ECB has previously been a major player on the second-hand bond markets in order to keep demand artificially high, hoping that its intervention could mean larger debt-laden economies like Italy and Spain would still be able to borrow on the open markets.
This morning the Spanish government would be asked to pay 5.1 per cent interest on 10-year loans – down from 6.7 per cent in late November – wile Italy would pay 5.43 per cent, down from a peak of 7.26 per cent just under three months ago.
The yield commanded by second-hand Irish bonds maturing in 2021 currently stood at 7.05 per cent this morning.
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