Cen­tral Bank starts buy­ing bonds as part of QE

Financial Mirror (Cyprus) - - FRONT PAGE -

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.

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