Money market report

ECB Monetary Operations

On Monday, May 21, the ECB announced its weekly Main Refinancing Operation.  The auction was conducted on Tuesday, May 22, and attracted bids from euro area eligible counterparties of €37.85 billion, €5.14 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, May 22, the ECB also conducted an auction for a seven-day fixed-term deposit intended to absorb €212 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, May 18.  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 €459.85 billion, with the ECB allotting €212 billion or 46.10% 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, May 23, 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 $0.3 billion, which was allotted in full at a fixed rate of 0.66%.

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 $10.27 billion, which amount was allotted in full at a fixed rate of 0.66%.

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 August 24 and November 23, 2012, respectively. Bids of €8.8 million were submitted for the 91-day bills, with the Treasury accepting €4.6 million, while bids of €4 million were submitted for the 182-day bills with the Treasury accepting the full amount. Since €0.45 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €8.15 million, to stand at €261.45 million.

The yield from the 91-day bill auction was 1.027%, i.e. 1.8 basis points higher than that on bills with a similar tenor issued on May 18, 2012, representing a bid price of 99.7411 per 100 nominal.  The yield from the 182-day bill auction was 1.197%, i.e. 0.7 basis point higher than on bills with a similar tenor issued on May 18, 2012, representing a bid price of 99.3985 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 maturing on August 31, 2012.