Asset Purchase Facility: Gilt Purchases - Market Notice 8 February 2018

As set out in the Minutes of the MPC’s meeting ending 7 February 2018, the MPC has agreed to make £18.3bn of gilt purchases, financed by central bank reserves, to reinvest the cash flows associated with the maturity on 7 March 2018 of a gilt owned by the Asset Purchase Facility (APF).
Published on 08 February 2018

2. Operations to make these gilt purchases will commence in the week beginning 12 March 2018.  The range of gilts eligible for purchase will remain unchanged from previous operations.  The Bank will continue, normally, to conduct three auctions a week: gilts with a residual maturity of 3-7 years will be purchased on Mondays; of over 15 years on Tuesdays; and of 7-15 years on Wednesdays.

3. The Bank does not intend to hold gilt purchase operations on 13 March 2018, the day of HMT’s Spring Statement this year, or 2 April 2018, due to the Bank Holiday.  These operations will instead be held on Monday 16 April 2018 and Tuesday 17 April 2018.  

4. The Bank intends to purchase evenly across the three gilt maturity sectors.  The size of auctions will initially be £1,220mn for each maturity sector.

5. The Bank will confirm details of the following week’s operations each Thursday at 16.00 (London time).  The Bank does not currently intend to purchase gilts where the Bank holds more than 70% of the “free float”, i.e. the total amount in issue minus government holdings.  The Bank will, however, continue to keep the gilts eligible for purchase by the APF under review.

6. As the DMO has ceased to publish intraday gilt yields, offers into APF gilt purchase operations will now be allocated based on their attractiveness relative to market mid yields, as published by Tradeweb, at the close of the auction.

7. Other than as amended by this Market Notice, previous Market Notices relating to the Bank’s gilt purchases under the APF will apply. 

Was this page useful?
Add your details...