Brussels, 04/08/2011 (Agence Europe) - On Thursday 4 August, the European Central Bank (ECB) resumed buying up eurozone government bonds on the market. ECB President Jean-Claude Trichet said the Bank had bought up public securities, albeit underlining that the programme had never been placed on the back burner.
The ECB resumed buying up Portuguese and Irish securities on the secondary market during the press conference of Jean-Claude Trichet, ECB President. Since March, it had not bought up any debts and recent remarks by monetary officials hinted that the programme had ended. Difficulties encountered by Spain and Italy on the securities markets have, however, renewed pressure on the ECB forcing it to resume its repurchase operations.
The ECB has announced, moreover, that it plans to launch, on 9 August, an exceptional six-month refinancing operation, in response to “renewed tensions in some financial markets in the euro area”. The Governing Council also decided to continue conducting its main refinancing operations as fixed rate tender procedures with full allotment for as long as necessary and at least until the end of the last maintenance period of 2011 on 17 January 2012.
During Thursday's meeting, the ECB Governing Council decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 1.50%, 2.25% and 0.75% respectively.
Jean-Claude Trichet said that, as expected, “recent economic data indicate a deceleration in the pace of economic growth in the past few months, following the strong growth rate in the first quarter”. He went on to add that “continued moderate expansion is expected in the period ahead. However, uncertainty is particularly high”.
With regard to price developments, euro area annual inflation rate was 2.5% in July 2011, following 2.7% in June. The relatively high inflation rates seen over the past few months largely reflect higher energy and other commodity prices, ECB recalls. “Looking ahead, inflation rates are likely to stay clearly above 2% over the coming months”, the ECB president said. (L.C./transl.jl)