ECB drains 77.5bn euros to offset bond buys

FRANKFURT: The European Central Bank comfortably attracted the 77.5 billion euros it needed on Tuesday to offset the money it has added to markets through its purchases of government bonds.

The ECB takes seven-day deposits from commercial banks on a weekly basis to counterbalance the amount it has spent buying bonds since last May, its part in the euro zone's strategy to calm the region's ongoing debt crisis.

A total of 71 banks offered up 91.9 billion euros, safely above the ECB's target of 77.5 billion euros.

The ECB paid a weighted average interest rate of 0.56 percent on funds deposited by commercial banks, compared with the 0.58 percent paid last week.

The ECB bought 369 million euros worth of bonds last week, down from 711 million a week earlier.

The bank can buy government and corporate bonds under its purchase programme but has not revealed how much it can spend, what it has bought or for how long it intends to buy for.

Most economists believe the ECB is focusing its purchases almost exclusively on the euro zone's debt trouble spots. Recent trends also suggest it concentrates its buying around periods of key periphery country debt auctions.