Bank of Lithuania
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No 25

Reverse auctions in the asset purchase programme

  • Abstract

    The Eurosystem started its asset purchase programme (APP) in March 2015. Net purchases were carried out until the end of 2018, while since the beginning of 2019 only reinvestments are being made. The APP consists of the public sector purchase programme (PSPP), third covered bond purchase programme, asset-backed securities purchase programme and corporate sector purchase programme. The Bank of Lithuania is participating in the PSPP by purchasing Republic of Lithuania government securities (GS), issued in domestic and international markets and debt securities issued by European supranational issuers. Seeking more effective and transparent purchases, the Bank of Lithuania made a decision to purchase domestic Lithuanian GS by implementing reverse auctions. The paper introduces reverse auctions in the context of monetary policy operations, the Bank of Lithuania’s purchase framework of reverse auctions, and examines the purchases of domestic Lithuanian GS by the Bank of Lithuania in the period of March 2015–June 2018.

    The views expressed are those of the author(s) and do not necessarily represent those of the Bank of Lithuania.

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