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ECB ready to buy bonds with negative yield

January 22, 2015, 20:24 UTC+3 FRANKFURT AM MAIN
The ECB will buy bonds with maturity from 2 to 30 years, particularly bonds with negative yield and securities with floating rates
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© EPA/ARNE DEDERT

FRANKFURT AM MAIN, January 22. /TASS/. The European Central Bank (ECB) will buy government bonds, including debt securities with negative yelds, as part of its quantitative easing program, ECB President Mario Draghi said at a press conference after the regulator's meeting on Thursday.

The ECB said in explanatory statements that the European regulator would buy bonds issued by euro area central governments, agencies and certain international and supranational institutions in the secondary market.

The ECB will buy bonds with maturity from 2 to 30 years, particularly bonds with negative yield and securities with floating rates. Draghi added that the ECB could start buying Greek bonds from July 2015. The ECB will start publishing detailed information about QE purchases in monthly reports.

The ECB has decided today to launch a QE program of €60 billion per month. Asset buying will start in March 2015 until the current economic situation imrpoves or until September 2016. The ECB asset buying program will total €1.08 trillion over 18 months, nearly twice as much as was expected. Analysts polled by Bloomberg expected the ECB to launch a quantitative easing program of approximately €550 billion in total.

IMF welcomes QE measures

The International Monetary Fund (IMF) welcomes measures announced today by the European Central Bank, Managing Director Christine Lagarde said on Thursday.

“The planned expansion of the ECB’s balance sheet will help lower borrowing cost across the euro area, raise inflation expectations and reduce the risk of a protracted period of low inflation. These measures will also strongly increase the prospects of the ECB achieving its price stability mandate,” Lagarde said.

Lagarde added that the accommodative monetary stance should be supported by “comprehensive and timely policy actions in other areas, not least structural reforms.”

William Murray, the spokesman at IMF, said at a regular briefing on Thursday that ECB steps were generally expectable for markets.

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