ECB Says It Didn’t Settle Any Government Bonds Last Week

The European Central Bank didn’t settle any government bond purchases last week.

The Frankfurt-based ECB said today it settled no bond purchases in the week ended March 23 as part of the Securities Markets Program. That means it has refrained from buying government bonds for five out of the past six weeks.

It will take seven-day term deposits tomorrow to absorb the 213.5 billion euros ($284 billion) of liquidity created since the program started in May 2010, a practice it employs to ensure the purchases don’t fuel inflation. The ECB also said that 4.27 billion euros of the bonds it held matured, decreasing the amount for absorption.

The purchases have dwindled since the ECB started offering banks unlimited three-year loans in December, injecting more than 1 trillion euros into the system. That has helped drive a bond-market rally and reduced the need for the central bank to intervene. ECB Executive Board member Benoit Coeure said today the crisis measures are “temporary” and that policy makers will unwind them as soon as conditions permit.

The ECB says its bond purchases are aimed solely at ensuring its interest rates are transmitted on financial markets. The program has nevertheless split the central bank’s policy makers, some of whom say it blurs the line between monetary and fiscal policy.

     Week      Purchases Settled (bln)  Total (bln)
     1              16.50*              16.5
     2              10.00*              26.5
     3               8.50*              35.0
     4               5.50*              40.5
     5               6.50*              47.0
     6               4.00*              51.0
     7               4.00*              55.0
     8               4.00*              59.0
     9               1.00*              60.0
     10              0.302              60.0
     11              0.176              60.5
     12              0.081              60.5
     13              0.009              60.5
     14              0.010              60.5
     15              0.338              60.5
     16              0.142              61.0
     17              0.173              61.0
     18              0.237              61.0
     19              0.323              61.5
     20              0.134              61.5
     21              1.384              63.5
     22              0.009              63.5
     23                  0              63.5
     24                  0              63.5
     25                  0              63.5
     26              0.711              64.0
     27              1.070              65.0
     28              0.713              66.0
     29              1.348              67.0
     30              1.965              69.0
     31              2.667              72.0
     32              0.603              72.5
     33              1.121              73.5
     34              0.164              73.5
     35              0.113              74.0
     36              2.313              76.5
     37              0.146              76.5
     38                  0              76.5
     39                  0              76.5
     40                  0              76.5
     41              0.711              77.0
     42              0.369              77.5
     43                  0              77.5
     44                  0              77.5
     45                  0              77.5
     46              0.432              76.5
     47                  0              77.0
     48                  0              77.0
     49                  0              76.0
     50                  0              76.0
     51                  0              76.0
     52                  0              76.0
     53                  0              76.0
     54                  0              75.0
     55                  0              75.0
     56                  0              75.0
     57                  0              75.0
     58                  0              74.0
     59                  0              74.0
     60                  0              74.0
     61                  0              74.0
     62                  0              74.0
     63                  0              74.0
     64                  0              74.0
     65                  0              74.0
     66                 22              96.0
     67                 14.3           110.5
     68                  6.65          115.5
     69                 13.3           129.0
     70                 13.96          143.0
     71                  9.79          152.5
     72                  3.95          156.5
     73                  3.80          160.5
     74                  2.31          163.0
     75                  2.24          165.0
     76                  4.49          169.5
     77                  4.00          173.5
     78                  9.52          183.0
     79                  4.48          187.0
     80                  7.99          194.5
     81                  8.58          203.5
     82                  3.66          207.0
     83                  0.64          207.5
     84                  3.36          211.0
     85                  0.02          211.0
     86                  0.46          211.5
     87                  1.1           213.0
     88                  3.77          217.0
     89                  2.24          219.0
     90                  0.06          219.0
     91                  0.12          219.0
     92                  0.06          219.5
     93                  0             219.5
     94                  0             219.5
     95                  0             219.5
     96                  0.03          218.0
     97                  0             218.0
     98                  0             213.5**

* = calculated by Bloomberg News
** = some bonds matured

To contact the reporter on this story: Gabi Thesing in London at gthesing@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net