LONDON, Aug 6 (Reuters) - Britain's Debt Management Office will lend gilts bought by the Bank of England via quantitative easing back to the market to ease strains caused by the asset purchase facility, the BoE said on Thursday.
The DMO will lend at least 10 percent of each gilt from the Asset Purchase Facility stock for up to one week. The lending will have no net impact on the DMO's cash management.
'The purpose of this arrangement is to relieve any undesirable frictions in the functioning of the market in specific gilts, arising from the Bank's purchases,' the BoE said in a joint statement with the DMO.
The scheme will be in place from August 7.
(Reporting by Matt Falloon) (UK Economics desk, uk.economics@reuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The DMO will lend at least 10 percent of each gilt from the Asset Purchase Facility stock for up to one week. The lending will have no net impact on the DMO's cash management.
'The purpose of this arrangement is to relieve any undesirable frictions in the functioning of the market in specific gilts, arising from the Bank's purchases,' the BoE said in a joint statement with the DMO.
The scheme will be in place from August 7.
(Reporting by Matt Falloon) (UK Economics desk, uk.economics@reuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.