Central Bank starts buying bonds as part of QE
The Central Bank of Cyprus started buying government bonds as part of the European Central Bank ‘quantitative easing’ (QE) programme, which would see investments opf up to 500 mln euros, spokeswoman Aliki Stylianou said,
“Following approval by the European Stability Mechanism on Thursday, in the framework of Cyprus adjustment programme implementation review, the CBC proceeded (on Friday) with the purchasing of Cypriot bonds in the secondary market, in the context of the ECB’s QE programme,” Stylianou said.
She added that the purchases lead to a reduction to the yields of Cypriot bonds by approximately 15 basis points.
“The CBC and the ECB will continue purchasing Cypriot bonds until the next programme review,” Stylianou noted.
The seventh review of Cyprus adjustment programme is expected to begin in mid July. Under the ECB rules, states whose bonds are below investment grade are eligible for QE only if they follow an adjustment programme and obtain positive implementation reviews on a quarterly basis.