Money Market Report | 27 April

ECB Monetary Operations

On Monday, April 23, the ECB announced its weekly Main Refinancing Operation (MRO).  The auction was conducted on Tuesday, April 24, and attracted bids from euro area eligible counterparties of €46.37 billion, €5.41 billion lower than the bid amount in the previous week. The 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, April 24, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €214 billion. This operation was 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, April 20.  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 €411.45 billion, with the ECB allotting €214 billion or 52% of the total bid amount. The marginal rate on the auction was set at 0.26%, with the weighted average rate at 0.26%.

On Wednesday, April 25, the ECB conducted a three-month Longer-Term Refinancing Operation to be settled as a fixed rate tender procedure with full allotment, with the rate fixed at the average rate of the MROs over the life of the operation. The auction attracted bids of €21.34 billion from euro area eligible counterparties, which amount was allotted in full, in accordance with current ECB policy.

Furthermore, on Wednesday, April 25, 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 $1.13 billion, which was allotted in full at a fixed rate of 0.64%.

On the same day, the ECB, in conjunction with the US Federal Reserve, conducted an 84-day US dollar funding operation through collateralised lending. This attracted bids of $5.20 billion, which amount was allotted in full at a fixed rate of 0.64%.

Domestic Treasury Bill Market

In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day and 182-day bills maturing on July 27 and October 26, 2012, respectively. Bids of €27.42 million were submitted for the 91-day bills, with the Treasury accepting €11.59 million while bids of €15 million were submitted for the 182-day bills with the Treasury accepting €7 million. Since €12.65 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €5.94 million, to stand at €223.87 million.

The yield from the 91-day bill auction was 0.891%, i.e. 0.4 basis point higher than that on bills with a similar tenor issued on April 20, 2012, representing a bid price of 99.7753 per 100 nominal.  The yield from the 182-day bill auction was 1.104%, i.e. 1.1 basis points higher than that on bills with a similar tenor issued on April 20, 2012, representing a bid price of 99.4450 per 100 nominal. 

During the week under review, Treasury bill trading on the Malta Stock Exchange amounted to €0.34 million and was conducted by the Central Bank of Malta in its role as market-maker.

On Tuesday the Treasury invited tenders for 91-day bills and 182-day bills maturing on August 3, and November 2, 2012, respectively.