As of the end of April, the value of Cypriot sovereign bonds held by the Eurosystem remained stable at €6.76 billion, despite the European Central Bank's continued efforts to deleverage its balance sheet. This action forms part of the ECB’s broader strategy to enforce restrictive monetary policies aimed at curbing inflation.

Data processed reveals that the €6.76 billion in holdings, which account for 29% of Cyprus’ public debt, are distributed between the Public Sector Purchase Programme (PSPP) and the Pandemic Emergency Purchase Programme (PEPP).

Specifically, the PSPP portfolio remained unchanged at €4.29 billion by the end of April, with no bond maturities occurring during this period. The last significant adjustment in the Eurosystem’s Cypriot bond holdings was a decrease by €285 million in July 2023. The bonds under PSPP currently have a weighted average maturity of 7.62 years.

In a notable policy shift, the ECB, as of August 2023, halted reinvestments under the broader Asset Purchase Programme (APP), which includes the PSPP, starting in July 2023. This reduction in market liquidity complements the ECB’s restrictive monetary approach.

The total balance of the APP stood at €2.9 trillion at the end of April, a decrease of €34.4 billion since the cessation, with public sector purchases reducing by €28.7 billion.

Furthermore, Cypriot bonds under the PEPP remained steady at €2.47 billion as of the end of March, with no net purchases recorded during February and March.

The overall balance of the PEPP as of the end of March reached €1.66 trillion, experiencing a minor reduction of €43 million, with public sector securities decreasing by €42 million to €1.61 trillion.