The European Central Bank will stop its weekly liquidity operations in Swiss francs due to declining demand and improved market conditions.
The ECB said in a statement that seven-day Swiss franc swap operations, which began in October 2008, would not continue past the end of January.
"This decision was made against the background of declining demand and improved conditions in the funding markets," it said in a statement.
Last week's operation attracted bids of just 1.6 billion euros, and traders and economists had not expected the operations would be renewed past the expiry date of end-January.
The ECB has phased back its foreign currency liquidity operations in recent months and in December started to unwind the extra lending in euros which has flooded markets with liquidity and pushed market lending rates to record lows.
The ECB made no mention in the statement of its U.S. dollar operations, which it had promised to conduct until January although it has said a swap line with the U.S. Federal Reserve would remain in place until the end of February.
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