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8 Jan 2015
BoE to reinvest GBP4.35bn of maturing gilts
FXStreet (London) - As part of its statement following the Bank of England’s Monetary Policy Committee’s meeting and announcement that it would be holding its Bank Rate at 0.5 percent, the MPC set out its planned £4.35bn of gilt purchases, financed by central bank reserves, to reinvest the cash flows associated with the maturity on 22 January 2015 of a gilt owned by the Asset Purchase Facility (APF).
The Bank announced that operations to make these gilt purchases will be held in the week beginning 26 January 2015. This schedule of operations will be kept under review by the Bank.
In line with its normal practice, the Bank expects to conduct three auctions in that week: gilts with a residual maturity of 3-7 years will be purchased on Monday 26 January; of over 15 years on Tuesday 27 January; and of 7-15 years on Wednesday 28 January.
The Bank announced that it intends to purchase evenly across the three gilt maturity sectors. The size of auctions will initially be £1,450m for each maturity sector.
The range of gilts eligible for purchase will remain unchanged from previous operations.
The Bank stated that it will confirm details of the operations on Thursday 22 January at 16.00. The Bank does not currently intend to purchase gilts where the Bank holds more than 70 percent of the “free float”, i.e. the total amount in issue minus government holdings. The Bank will, however, continue to keep the identity of gilts eligible for purchase in the APF under review.
The Bank announced that operations to make these gilt purchases will be held in the week beginning 26 January 2015. This schedule of operations will be kept under review by the Bank.
In line with its normal practice, the Bank expects to conduct three auctions in that week: gilts with a residual maturity of 3-7 years will be purchased on Monday 26 January; of over 15 years on Tuesday 27 January; and of 7-15 years on Wednesday 28 January.
The Bank announced that it intends to purchase evenly across the three gilt maturity sectors. The size of auctions will initially be £1,450m for each maturity sector.
The range of gilts eligible for purchase will remain unchanged from previous operations.
The Bank stated that it will confirm details of the operations on Thursday 22 January at 16.00. The Bank does not currently intend to purchase gilts where the Bank holds more than 70 percent of the “free float”, i.e. the total amount in issue minus government holdings. The Bank will, however, continue to keep the identity of gilts eligible for purchase in the APF under review.