Yesterday’s ECB MRO was double than usual, at 119.4bn rather than the previous 51.2bn, an increase of €68.2bn. Going through daily ECB data it looks like current accounts holdings and resource to the deposit facility did not change much (actually the deposit facility was €2.9bn lower while current accounts increased by €5.5bn) meaning that bank reserves increased by €2.6bn. On the other hand, ‘Net liquidity effect from Autonomous Factors and SMP’ increased by €66.3bn which basically corresponds to banknotes and government deposits. Since there was an equal increase in ECB’s liabilities it is clear that no ELA repayment was the reason for the increased MRO lending.

The most probable explanation is an increase in government deposits. Still, this increase is just huge and requires more details (which don’t seem to be available at this point).

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