Honohan: Ireland could benefit from bond-buying initiative
The Governor of the Central Bank Patrick Honohan has said Ireland could benefit from the ECB's decision to buy the bonds of troubled Eurozone countries.
Yesterday, the European Central Bank unveiled its bond-buying initiative, the latest plan to tackle the economic crisis.
Its planned large-scale purchases of short-term government bonds would drive up their price and push down their interest rate, or yield, making it less expensive for countries to borrow money.
The new plan goes well beyond the ECB's earlier, limited bond-purchase programme, which was not big enough to decisively lower borrowing costs.
After the ECB plan - dubbed Outright Monetary Transactions or OMT - was announced, the yields on government bonds across Europe fell and stock markets rallied.
Mr Honohan has said the measure showed the ECB had the tools to fix the euro crisis and is prepared to use them.
He said the German Bundesbank, which opposed the move, would eventually support it.
Mr Honohan said he did not expect the ECB to start buying Irish bonds immediately, but said the programme would apply to countries coming back into the market.
