From September 28, the central bank wants to purchase government bonds with long maturities.
(Photo: AP)
London –
The British financial markets remain turbulent. The local currency pound went up and down on Wednesday after the Bank of England announced bond purchases to stabilize the stock markets.
The British currency then initially jumped by around one percent to $ 1.0837, but then immediately rushed back down to $ 1.0685. At the same time, investors grabbed British government bonds, which caused the yields, which had been soaring in the past few days, to come down.
The yield on the particularly interest-sensitive two-year British bonds fell to 4.278 percent from the previous 4.550 percent. The interest on the ten-year paper dropped to 4.373 from 4.558 percent.
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The Bank of England has launched a temporary government bond-buying programme. From September 28, the central bank will purchase long-dated government bonds to “restore orderly market conditions,” she said.
The fall of the pound sterling after the announcement by the new British Prime Minister Liz Truss that she wanted to cushion the high energy prices with aid worth billions and at the same time lower taxes had caused turmoil on the stock exchanges. Doubts about the financing of the projects pushed the British currency to an all-time low of $1.0327 at the beginning of the week. The UK two-year bond yield had shot up more than a full percentage point in two days
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