The ECB Accelerated Spanish Debt Purchases By 6.8% In June

The ECB’s renewed recommendation balances the downside risks on the macroeconomic outlook

The European Central Bank (ECB) acquired 5.426 billion euros in Spanish bonds during the month of June as part of its PSPP purchase programme, which has been questioned by the German Constitutional Court. The amount of debt purchased represents an increase of 6.8% over the net purchases made by the institution in May.

The June figure accounts for 21.5% of the total of 25.23 billion euros allocated for the month by the ECB for the acquisition of sovereign debt of the euro area countries participating in the programme. So it has exceeded the capital key of 11.9% corresponding to Spain.

Since the launch of the programme in 2015, the central bank has acquired a net 281.396 billion euros of Spanish debt. It has bought 22.394 billion euros in Spanish sovereign bonds since the reactivation of the PSPP programme.

That said, the country most favoured in June by the ECB’s purchases under this programme was France. The net monthly amount was 11.781 billion euros, 46.7% of the total, when the capital key for France is 20.4%. This figure is more than double the 5.459 billion acquired in May as part of the PSPP.

In the case of Italy, the ECB bought 2.327 billion euros in June, compared with 2.853 billion in May. The June figure is equivalent to 9.2% of all the sovereign bonds acquired, below the Italian capital key of 17%. The ECB’s net purchases of German debt totalled 338 million euros, compared with 6.621 billion in May, 1.3% of its net purchases, when the Bundesbank’s weight is 27%.

Meanwhile, the ECB indicated that last week it allocated 20.151 billion euros to the acquisition of assets under its pandemic emergency purchase programme (PEPP). This was the lowest amount of weekly purchases since mid-April. The programme has already reached a volume of 365.671 billion euros since its launch at end-March.

The previous week, the ECB allocated a total of 30.012 billion euros to the purchase of assets under the PEPP.