September 3, 2018 / 3:42 PM / 22 days ago

ECB's stimulus purchases dwindle to all-time low in August

FRANKFURT (Reuters) - The European Central Bank’s debt purchases in August under its stimulus programme were the lowest since the scheme began amid light summer volumes on financial markets, data showed on Monday.

A sculpture showing the Euro currency sign is seen in front of the European Central Bank (ECB) headquarters in Frankfurt, December 8, 2011. REUTERS/Alex Domanski/File Photo

The ECB is winding down its bond-buying programme and plans to stop it in December after nearly four years, provided that inflation in the euro zone does not take a turn for the worse.

The central bank bought just 24.8 billion euros’ ($29 billion) worth of debt in August, when many sellers in Europe are away on holiday. It was the smallest amount since the programme started in March 2015.

Private sector debt, which includes corporate and covered bonds as well as loan bundles known as asset-backed securities, accounted for 9 percent of the total, compared to between 16 and 30 percent in the previous seven months.

Specifically, ECB purchases of corporate debt totalled just 1.5 billion euros, a record low, and its holdings of asset-backed securities shrank by half a billion euros.

Among bonds issued by the public sector, the ECB bought 6 percent more Spanish debt and 1 percent more German debt than implied by the size of the two respective economies, according to Reuters calculations that exclude Greece. By the same measure, France and Italy were slightly underbought.

Greece has never been part of the programme due to its low credit rating.

In a sharp reduction from the previous six months, the average maturity of the government bonds bought by the ECB was 9.7 years, according to Reuters calculations.

($1 = 0.8613 euros)

Reporting By Francesco Canepa and Balazs Koranyi; Editing by Susan Fenton

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