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ECB to buy unlimited volume of bonds under new programme

Published on Sep 6, 2012 8:58 PM
The European Central Bank held its main interest rate at a record low of 0.75 per cent on Thursday, holding fire after a pick-up in inflation last month offset pressure to breathe life into the flagging euro zone economy by easing borrowing costs. -- PHOTO: REUTERS

FRANKFURT (AFP) - The European Central Bank unveiled on Thursday the details of a new programme to purchase an unlimited amount of the sovereign bonds of euro zone countries, but strictly within the bank's policy mandate.

ECB chief Mario Draghi told a news conference the bank would launch a scheme of "Outright Monetary Transactions or OMTs in secondary markets for sovereign bonds in the euro area."

The programme, which would replace a previous much-contested one called SMP, would cover sovereign bonds with maturities of up to three years and would have strict conditions attached to it, Mr Draghi told a news conference here. The bank has set no limit to the volume of bonds it will purchase under the new programme, he added.

"As we said a month ago, we need to be in the position to safeguard the monetary policy transmission mechanism in all countries of the euro area."

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