articles | 17 September 2015

ECB buys €98m of Cypriot securities

The European Central Bank purchased since July 2015 a total of €98m in Cypriot government securities with an average maturity of 5.27 years as part of its expanded asset purchase programme.

“Cyprus is eligible for a total of €2.2 billion throughout the quantitative easing programme,” which aims at stimulating the euro area’s anaemic growth and helping the ECB meet its medium term inflation target of 2%, Bank of Cyprus said in an emailed statement.

The implementation of the ECB’s asset purchase programme for Cyprus, which has a non-investment grade sovereign rating and does therefore not meet the main eligibility criterion of the ECB, became possible after the successful completion of the sixth and seventh bailout programme review.

As “Cyprus’s outstanding issued debt is around €4 billion, the current amount available for quantitative easing is around €1.3 billion,” the bank said. “Moreover, there is roughly an excess absorption capacity of around €1.2 billion for future debt issues”.

Cyprus’s debt eligible for ECB purchases consists mainly of a €1 billion bond maturing in 2022, a €796 million security maturing in 2020, a €750 million security maturing in 2019 and almost €1.3 billion in government development stock, also known by their Greek acronym KOXA, the bank said.

The ECB purchased since it commenced with the implementation of the quantitative easing in March a total of €292.3 billion in securities with an average maturity of 8.03 years including €68.2 billion, €53.8 billion and €46.6 billion in German, French and Italian assets with an average maturity of 7.09, 7.87 and 9.12 years respectively, Bank of Cyprus said.

Source: Cyprus Mail

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