The European Central Bank has bought ?16.5bn of eurozone government bonds as part of the ?750bn rescue plan.The scale of the ECB??s intervention was at the low end of analysts?? expectations.
The move to buy eurozone debt has already split the ECB governing council amid fears that the move would undermine policies aimed at price stability. However, Jean-Claude Trichet, ECB president, has said that the bank??s action is different to quantitative easing by the US and UK, which sought to reverse the economic downturn.
To offset the inflationary impact, the ECB will on Tuesday launch a ??sterilisation? operation to absorb ?16.5bn into one-week fixed-term deposits ?? withdrawing the liquidity it has injected via its bond purchases
