Cypriot bonds held by the Eurosystem in the context of the Public Sector Purchases Programme (PSPP) and the Pandemic Emergency Purchases Programme (PEPP) amounted to €7.12 billion according to the latest data published by the ECB.

On the basis of available data, the total purchases of Cypriot bonds by the Eurosystem amount to approximately 29.5% of the Cypriot public debt.

According to data published by the European Central Bank, analysed by CNA, the cumulative worth of Cypriot bonds, purchased mainly by the Central Bank of Cyprus and the ECB under the PSPP, amounted to €4.59 billion in the end of June, while net purchases in the same month amounted to €8 million. The weighted average maturity of these bonds stood at 9.12 years, the ECB said.

Net bonds purchases under the PSPP have been terminated in June 2022, with the Eurosystem reinvesting, in full, the principal payments from maturing securities purchased under the APP until the end of February 2023.

The portfolio of the wider Asset Purchases Programme (APP) will decline at a measured and predictable pace, as the Eurosystem will not reinvest all of the principal payments from maturing securities, the ECB said, adding that “the decline will amount to €15 billion per month on average until the end of June 2023 and its subsequent pace will be determined over time.”

In this context, the total outstanding balance of the ECB’s wider asset purchases programme (APP) amounted to €3.18 trillion with net purchases in May declining by €15.03 billion. Of the APP’s total balance, €2.53 billion are allocated to public bond purchases via the PSSP, the data show.

Cypriot bonds purchased under PEPP amount to €2.54 billion.

According to the ECB data, total Cypriot bonds held in the balance sheet of the CBC and the ECB under PEPP amounted to €2.54 billion in the end of May, with net purchases in April – May amounting to €50 million. The bonds’ WAM stood at 8.51 years.

With net purchases under PEPP terminated since last March, the ECB Governing Council said it intends to reinvest the principal payments from maturing securities purchased under the programme until at least the end of 2024.

With the ECB entering in restrictive cycle announcing nine, consecutive interest rate hikes since last July, Asset Manager Pimco estimates that the ECB will aim for an earlier cutback in PEPP reinvestments, potentially as soon as this year.