Italian bonds included in ECB stimulus plan

Italian bonds included in ECB stimulus plan
ECB chief Mario Draghi. Photo: Daniel Roland/AFP
The European Central Bank (ECB) on Monday set out on its massive bond purchase programme, including €150 billion worth of Italian bonds, as it seeks to ward off deflation and stimulate growth in the single currency area.

Most of the Italian bonds would be bought through the Bank of Italy, Ansa reported. 

ECB chief Mario Draghi announced the 18-month plan to buy at least €1.14 trillion ($1.2 trillion) in bonds, at a rate of €60 billion per month, back in January.

But it was only last week that he named Monday as the exact start date for the scheme.

"The ECB and Eurosystem national central banks have, as previously announced, started purchases under the Public Sector Purchase Programme," the ECB announced via Twitter on Monday.

The bank hopes that by buying bonds off investors they will invest the money elsewhere, thus boosting growth and preventing a dangerous cycle of falling prices from setting in.

Italian investors responded well to the news, pushing the FTSE Mib in Milan up by 0.57 percent to end the day’s trading at 22,564 points – a level not seen since the spring of 2011, Ansa reported.

The Bank of Italy bought €130 billion of Italian State paper while the ECB itself bought about €20 billion, Ansa said.

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