The European Central Bank said it will take €129 billion in term deposits from euro-area banks tomorrow to neutralise the extra money created by its bond purchases.

The Frankfurt-based ECB said it received 100 bids for the seven-day deposits totalling €173.6 billion. The marginal rate was 1.05 per cent.

The €129 billion the ECB will absorb correspond to the total amount of extra liquidity its bond-purchase programme has created since it began in May last year.

The ECB, which sterilises its bond purchases to ensure they don't fuel inflation, was forced to start buying Italian and Spanish securities on August 8th to contain Europe's sovereign debt crisis.

The central bank settled purchases worth €13.3 billion last week, down from €6.65 billion the previous week.

Reuters