FRANKFURT, Oct 5 (Reuters) - The European Central Bank let its pile of Italian government bonds shrink in the last two months, signalling it did not see the need to rein in borrowing costs for the debt-laden country.
The ECB's holding of Italian public sector bonds held as part of its Pandemic Emergency Purchase Programme (PEPP) shrank by 1.24 billion euros in August and September, likely as a result of bonds maturing and not being replaced.
This followed a 9.76 billion euros increase in the previous two months, when the ECB announced plans to use PEPP reinvestments to prevent bond yields and spreads from rising too far or too fast in the weakest countries.
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