Asset purchase programmes
Aiming to maintain inflation rates below, but close to, 2 per cent over the medium term, together with other national central banks within the Eurosystem, we carry the expanded asset purchase programme. The Eurosystem currently reinvests principal payments from maturing securities purchased under the expanded asset purchase programme (APP). The period of APP net asset purchases ended in December 2018.
The expanded asset purchase programme consists of the:
- third covered bond purchase programme (CBPP3);
- asset-backed securities purchase programme (ABSPP);
- corporate sector purchase programme (CSPP);
- public sector purchase programme (PSPP).
The Bank of Lithuania participates in the PSPP. As participants in this programme, we purchase European supranational institution bonds (only in the net purchases phase) and Republic of Lithuania government securities, issued in euro and the maturity of which at the time of their purchase is 1 to 30 years.
The share purchased by national central banks is calculated in line with their contribution to the ECB’s capital. The value of securities acquired (held) by the Bank of Lithuania under the PSPP is presented on a monthly basis in the Bank of Lithuania balance sheet, available in the ECB Statistical Data Warehouse.
The Bank of Lithuania, like the other euro area national central banks and the ECB, applies a uniform practise when announcing the results of purchases under the PSPP. On a weekly basis, the Eurosystem publishes the aggregate book value of the securities held under the PSPP, on a monthly basis – the amounts and weighted average residual maturities by issuer residence.
Reverse auctions of the public sector purchase programme
We purchase Republic of Lithuania government securities under the PSPP by conducting reverse auctions, sometimes – bilateral transactions. This initiative was approved by the Governing Council of the ECB after it assessed the results of the auctions conducted on a trial basis by the Bank of Lithuania, Banque de France and De Nederlandsche Bank in October–December 2015.
The Bank of Lithuania’s auctions are open to its monetary policy counterparties that are used for the investment of euro-denominated investment portfolios. In the APP reinvestment phase, the auctions are conducted at least once a month, while usually they take place on Thursdays on a weekly basis. Results of the PSPP auctions are available on the Bank of Lithuania website (170 KB ).