The European Central Bank Makes a €63 Billion Bond Buy

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By Jacob Maslow

The European Central Bank (ECB) has been the center of focus for economies around the world since October. The ECB recently announced that they will be extending their bond buying program well into 2017 in an effort to help stabilize the euro.

Data released by the bank showed that frontloading occurred in the month of November, with the bank purchasing €63 billion worth of bonds during the month. Liquidity in the region dries up during the holiday period, and the accelerated rate is an attempt to purchase bonds that may not be available during the month of December.

The 19 nation euro area is trying to revive inflation, and the ECB announced that they intend to purchase €60 billion worth of bonds each month.

Mario Draghi, the president of the ECB, reaffirmed that interest earned on the maturing debt would be the invested into the country. Many analysts expected the ECB to increase their bond buying program to further help quantitative easing, but ECB was reluctant to take further measures.

The “recalibration” is an attempt to inject €680 billion into the economy by 2019. In total, the quantitative easing program has a worth of €1.5 trillion. Bond buying purchases are thickly suspended between December 22 and January 1. The ECB is expected to intensify its purchasing this month before the suspension begins on December 22. Buying will resume on January 4.

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