Asset purchase programmes

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The ECB’s Asset Purchase Programme (APP) is part of a package of non-standard monetary policy measures that also includes targeted longer-term refinancing operations, and which was initiated in mid-2014 to support the monetary policy transmission mechanism and provide the amount of policy accommodation needed to ensure price stability.

It consists of the

APP net purchases, by programme

Between October 2014 and December 2018 the Eurosystem conducted net purchases of securities under one or more of the asset purchase programmes. During the net asset purchase phase, monthly purchase pace averaged:

€60 billion from March 2015 to March 2016

€80 billion from April 2016 to March 2017

€60 billion from April 2017 to December 2017

€30 billion from January 2018 to September 2018

€15 billion from October 2018 to December 2018

Between January 2019 and October 2019, the Eurosystem fully reinvested the principal payments from maturing securities held in the APP portfolios. The Governing Council aimed to maintain the size of its cumulative net purchases under each constituent programme of the APP at their respective levels as at the end of December 2018.

On 12 September 2019 the ECB Governing Council decided that “net purchases will be restarted under the Governing Council’s asset purchase programme (APP) at a monthly pace of €20 billion as from 1 November 2019. The Governing Council expects them to run for as long as necessary to reinforce the accommodative impact of its policy rates, and to end shortly before it starts raising the key ECB interest rates.” On 12 March 2020 the ECB Governing Council decided to add “a temporary envelope of additional net asset purchases of €120 billion” until the end of 2020.

Note: The average monthly APP targets were first set by the ECB Governing Council at the beginning of the PSPP in March 2015. The additional envelope of EUR 120 bn decided by the Governing Council on 12 March 2020 has been linearized for illustration in this chart, while it will be implemented in full according to the established principles with additional flexibility.

In addition, reinvestments of the principal payments from maturing securities purchased under the APP will continue, in full, for an extended period of time past the date on which the Governing Council begins to raise the key ECB interest rates, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation.

The table presents the Eurosystem holdings at the end of the month and a breakdown in the change of Eurosystem holdings.

Eurosystem holdings under the asset purchase programme

Changes of holdings (previous month) ABSPP CBPP3 CSPP PSPP APP Holdings* in July 2020 30,069 283,964 224,220 2,258,438 2,796,691 Monthly net purchases -527 500 4,004 15,150 19,127 Quarter-end amortisation adjustment and redemptions of coupon STRIPS 0 0 0 0 0 Holdings* in August 2020 29,542 284,464 228,224 2,273,588 2,815,819 *At amortised cost, in EUR millions, at month-end.

Figures may not add up due to rounding. Figures are preliminary and may be subject to revision.

Amortisation adjustment are made at the end of each quarter. The amortisation emerges from an accounting principle that implies that securities purchased at prices below face value have to be revalued upwards over time towards maturity, and revalued downwards over time, if purchased at prices above face value. STRIPS are accounted for at the end of each month (see Question 1.4 in the Q&A).

History of cumulative purchase breakdowns under the APP

Weekly changes are reported below and in the Eurosystem weekly financial statement. Full historical data are available in the Statistics section under Data on daily liquidity conditions.

APP cumulative net purchases, by programme

The stock of Eurosystem APP bonds stood at €2,940 billion at the end of August 2020. The cumulative net purchases are illustrated below.

APP redemptions

The Eurosystem adheres to the principle of market neutrality via smooth and flexible implementation. To this end, the Governing Council decided to distribute the reinvestment of principal redemptions through time to allow for a regular and balanced market presence.

The table presents estimated monthly redemptions for the next 12 months.

Expected monthly redemption amounts for the APP over a rolling 12-month horizon (in EUR millions) month ABSPP CBPP3 CSPP PSPP APP Aug 20 581 1,621 74 423 2,699 Sep 20 722 3,447 861 18,930 23,960 Oct 20 1,046 6,568 875 23,629 32,118 Nov 20 667 5,280 2,431 22,509 30,887 Dec 20 675 302 701 8,871 10,549 Jan 21 1,423 5,068 2,589 15,064 24,144 Feb 21 465 1,989 846 10,268 13,568 Mar 21 822 2,759 2,730 12,683 18,994 Apr 21 581 4,047 1,085 28,417 34,130 May 21 417 2,809 1,144 14,353 18,723 Jun 21 1,339 316 773 19,519 21,947 Jul 21 510 1,109 331 24,531 26,481 Aug 21 1,739 937 946 6,056 9,678 *Actual redemption, based on month end data.

ECB estimates in italics. Figures may not add up due to rounding. Figures are preliminary and may be subject to revision.

Note: Realised redemptions may differ from estimated redemptions.

History of APP redemptions