Jan. 9 (Bloomberg) -- The European Central Bank bought more government bonds last week.
The Frankfurt-based ECB said it settled 1.1 billion euros ($1.4 billion) of bond purchases in the week ended Jan. 6, compared with 462 million euros the previous week. The ECB will take seven-day term deposits tomorrow to absorb the 213 billion euros of liquidity created since its bond program started on May 10 last year, a practice it employs to ensure the purchases don’t fuel inflation.
The ECB loaned banks a record 489 billion euros for three years on Dec. 21 in an effort to keep credit flowing to the economy during the sovereign debt crisis. The central bank cut its 2012 euro-area growth forecast to 0.3 percent last month.
ECB officials have resisted calls from investors and governments to backstop the currency bloc and combat the turmoil by boosting bond purchases. The ECB says it’s up to governments to solve the crisis, and asking the central bank to rescue states would damage its independence and credibility.
--Editor: Matthew Brockett
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