Ireland a big winner from €2.5trn ECB bond-buying scheme
The massive bond-buying programme undertaken by the European Central bank helped reduce our borrowing costs and allowed the State to issue more bonds at lower interest rates, according to a study by Central Bank of Ireland staff.
In just over four years to the end of 2018, the ECB's Asset Purchase Programme bought over €2.5trn worth of securities, including more than €30bn of Irish government bonds.
Purchasing bonds on this enormous scale - quantitative easing - has been put in place by central banks across the world.
Their bond purchases cut supply on the secondary market, pushing up prices and reducing the yield.
The aim of the programme is to lift inflation, something that hasn't happened in the eurozone which looks like entering the next recession with interest rates nailed at zero.
Those low rates have been a boon for the National Treasury Management Agency which, for example, issued all Treasury Bills and ECP at negative euro-equivalent interest rates in 2017.
The three central bank researchers - John Larkin, PJ Anderson and Sean Furlong - said that since the beginning of 2015, the 'generic' 10-year yield has traded between a high of 1.78pc, reached in June 2015 and low of 0.33pc, reached in September 2016.
State interest payments have fallen steadily in tandem with the ECB programme. As a so-called peripheral state, Ireland benefited more than a core country like Germany from the purchases.