ECB boosts liquidity supply

The European Central Bank (ECB) yesterday boosted cash supply in the market via its short and long term liquidity operations. The body re-established currency swap lines with the US Federal Reserve as part of its plan to stop Greece’s debt woes from spreading and aims to keep ample liquidity for investors available on favourable terms. Banks borrowed $9.2 bn (£6.1bn) at the ECB’s first US dollar operation since the end of January, when operations were stopped as part of the ECB’s exit strategy, and paid 1.22 per cent interest. This was the highest volume since 10 December. The ECB lent banks €20.48bn over 35 days up from €15.73bn in the 28-day operation in April.