ECB slows bond purchases further in August lull

[FRANKFURT] The European Central Bank bought fewer bonds under its stimulus schemes in August, data showed on Monday, likely keeping its powder dry as markets improved after a pandemic-induced crash and volumes dwindled due to the holiday season.

The ECB, which will update its policy stance on Thursday, bought 78.6 billion euros (S$$126.9 billion) worth of bonds last month across its different schemes, a 26 per cent drop from July.

For comparison, the central bank had splashed 159 billion euros on financial assets in June to help stabilise financial markets hit by the coronavirus pandemic and the ensuing lockdown measures.

ECB board member Isabel Schnabel, who heads the central bank's market operations, told Reuters on Aug 28 that purchase volumes reflected "seasonality patterns" as well as improved market conditions.

Ms Schnabel said she saw no reason for the ECB to add to its stimulus measures at present but investors have been speculating that its emergency bond purchases will be boosted again by year-end.

The ECB has some 850 billion euros left to spend under its Pandemic Emergency Purchase Programme by next June, on top of its regular, smaller bond-buying scheme.

REUTERS