Bank of England finishes its emergency bond purchase program on November 29

Bank of England has stated its position to be cautious regarding the selloff the 19 billion pounds ($22 billion) of British government bonds. Those bonds were purchased as part of emergency actions taken over the last few weeks. The announced cautious approach to selling off the government bonds means that it would depend on demand.

As it was reported by Bloomberg, the central bank of Great Britain stated that the mentioned bonds will be made available for prospect buyers on November 29. 

These actions are aimed at avoiding reappearing of dysfunction in the British bond market, as it is still shaky after an extremely large selloff, which was additionally worsened by forced selling from pension funds. Those events led to the Bank of England intervening in the situation.

Said intervention was performed alongside another program of the Bank of England related to the assets accumulated over the period of quantitative easing. The bonds mentioned on Thursday were purchased under the financial-stability mandate, and are completely separate assets aren’t connected with other assets or other programs.

The Bank of England noted that this fact provide potential buyers with a possibility to express their intention to buy the assets from the portfolio by using a special form, which was called “reverse enquiry window.” The bids would be processed considering the level of demand and in comparison to market levels.

The bank also explained in its statement that such a strategy suggests there might be large volumes of bonds being sold if demand is high enough, while it’s also possible that only a few or no bonds at all might be purchased if demand is weak.