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Cypriot bonds held by Eurosystem exceed €7 billion in January

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Cypriot bonds held by the Eurosystem in the context of the Public Sector Purchases Programme (PSPP) and the Pandemic Emergency Purchases Programme (PEPP) exceeded €7 billion in January 2023.

On the basis of available data, the total purchases of Cypriot bonds by the Eurosystem amount to approximately 30 per cent of the Cypriot public debt.

According to data published by the European Central Bank, analysed by CNA, the cumulative worth of Cypriot bonds, purchased mainly by the Central Bank of Cyprus and the ECB under the PSPP, amounted to €4.52 billion in the end of January, while net purchases in the same month amounted to €16 million. The weighted average maturity of these bonds stood at 8.93 years, the ECB said.

Net bonds purchases under the PSPP were terminated in June 2022, with the Eurosystem reinvesting, in full, the principal payments from maturing securities purchased under the APP until the end of February 2023.

The portfolio of the wider Asset Purchases Programme (APP) will decline at a measured and predictable pace, as the Eurosystem will not reinvest all of the principal payments from maturing securities, the ECB said, adding that “the decline will amount to €15 billion per month on average until the end of June 2023 and its subsequent pace will be determined over time.”

Cypriot bonds purchased under PEPP amount to €2.49 billion

According to the ECB data, total Cypriot bonds held in the balance sheet of the CBC and the ECB under PEPP amounted to €2.49 billion in the end of January, with net purchases from December 2022 to January 2023 amounting to €6 million. The bonds’ WAM stood at 8.1 years.

With net purchases under PEPP terminated since last March, the ECB Governing Council said it intends to reinvest the principal payments from maturing securities purchased under the programme until at least the end of 2024.

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