Money market repot

ECB decisions

On Thursday, January 12, the Governing Council of the ECB decided to keep the interest rate unchanged at 1.00% on the main refinancing operations (MROs). Interest rates on the marginal lending facility and on the deposit facility were also left unchanged, at 1.75% and 0.25%, respectively. 

ECB Monetary Operations

On Monday, January 9, the ECB announced its weekly MRO.  The auction was conducted on Tuesday, January 10, and attracted bids from euro area eligible counterparties of €110.92 billion, €19.70 billion lower than the amount bid for in the previous week. The bid amount was allotted in full at a fixed rate equivalent to the prevailing main refinancing rate of 1.00%, in accordance with current ECB policy.

On Tuesday, January 10, the ECB also conducted an auction for a seven-day fixed-term deposit intended to absorb €213 billion. This operation is designed to sterilise the effect of purchases made under the Securities Markets Programme that were settled but had not yet matured by the previous Friday, January, 6.  The auction was carried out at a variable rate, with euro area eligible counterparties allowed to place up to four bids at a maximum rate of 1.00%. It attracted bids amounting to €376.72 billion, with the ECB allotting €213 billion, or 56.54%, of the total amount bid for. The marginal rate on the auction was set at 0.34%, with the weighted average rate at 0.32%.

On Wednesday, January 11, the ECB conducted a seven-day US dollar funding operation through collateralised lending in conjunction with the US Federal Reserve.  This operation attracted bids of $5.72 billion, which were allotted in full at a fixed rate of 0.58%.

Domestic Treasury Bill Market

In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day and 273-day bills maturing on April 13, 2012 and on October 12, 2012, respectively.  Bids of €52.52 million were submitted for the 91-day bills, with the Treasury accepting only €4.25 million, while bids of €65 million were submitted for the 273-day bills, with the Treasury accepting only €5 million. Since €24.99 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €15.74 million, to stand at €222.97 million.

The yield from the 91-day bill auction was 0.749%, i.e. 6.1 basis points lower than that on bills with a similar tenor issued on January 6, 2012, representing a bid price of 99.8110 per 100 nominal.  The yield from the 273-day bill auction was 1.3990%, i.e. 17.7 basis points lower than on bills with a similar tenor issued on October 14, 2011, representing a bid price of 98.9502 per 100 nominal.

During the week under review, there was no trading on the Malta Stock Exchange.

On Tuesday, the Treasury invited tenders for 91-day bills and 182-day bills maturing on April 20, 2012 and on July 20, 2012, respectively.