The European Central Bank envisions buying large volumes of sovereign bonds for a period of one to two months once its “OMT” program is launched, but would then suspend purchases during anassessment period, senior central bank sources told Reuters.
Until now, the details of how the ECB plans to conduct the bond-buying program unveiled last month by President Mario Draghi have been murky.
Economists have questioned what the bank’s exit strategy might be, or in other words how it would put a stop to “Outright Monetary Transactions” once it had begun to buy the sovereign debt of struggling euro zone countries.
The answer appears to be that the ECB would suspend its purchases on a regular basis for a period that could last up to a month or more.
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