Date
25 May 2017
Comments by an ECB official that the bank will front-load its bond purchases sent the euro tumbling on Tuesday. Photo: Bloomberg
Comments by an ECB official that the bank will front-load its bond purchases sent the euro tumbling on Tuesday. Photo: Bloomberg

ECB to step up bond purchases in coming weeks

The European Central Bank (ECB) will step up bond purchases in the coming weeks under its 1.1 trillion euro stimulus program, a bank official said.

Benoît Cœuré, a member of the ECB’s executive board, said in London Monday evening that central bankers will front-load some of their purchases of sovereign debt in May and June to deal with an expected shortage of liquidity in July and August, Financial Times reported.

Cœuré also raised concerns about the recent bout of volatility in the market for eurozone sovereign debt.

The rapidity of the recent reversal in the price of Bunds was “yet another incident of extreme volatility in global capital markets showing signs of reduced liquidity,” he was quoted as saying

The remarks, made at a financial forum, were made public by the ECB Tuesday morning. 

The news sent the euro plummeting on the forex markets, with the the unit suffering its second biggest one-day fall in three and a half years, FT noted.

Traders viewed the ECB official’s comments as an attempt to counter speculation that the central bank would begin to taper its bond buying in the months ahead.

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