Money market report

ECB Monetary Operations

On Monday, June 11, the ECB announced its weekly Main Refinancing Operation.  The auction was conducted on Tuesday, June 12, and attracted bids from euro area eligible counterparties of €131.75 billion, €12.38 billion higher than the bid amount in the previous week. This 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, June 12, the ECB conducted a Special-Term Refinancing Operation with a maturity of 28 days. This attracted bids of €18.91 billion which was allotted in full at a fixed rate equivalent to the prevailing main refinancing rate of 1.00%, also in accordance with the current ECB policy.

Also on Tuesday, June 12, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €212.0 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, June 8.  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 €318.56 billion, with the ECB allotting €212.0 billion, or 66.55%, of the total bid amount. The marginal rate on the auction was set at 0.26%, with the weighted average rate also at 0.26%.

On Wednesday, June 13, 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 $2.45 billion, which was allotted in full at a fixed rate of 0.67%.

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 September 14 and December 14, 2012 respectively. Bids of €3.7 million were submitted for the 91-day bills, with the Treasury accepting the full amount, while bids of €2.0 million were submitted for the 182-day bills, with the Treasury accepting €1.0 million. Since €6.75 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €2.05 million, to stand at €263.8 million.

The yield from the 91-day bill auction was 1.029%, i.e. 6.5 basis points higher than on bills with a similar tenor issued on June 8, 2012, representing a bid price of 99.7406 per 100 nominal.  The yield from the 182-day bill auction was 1.235%, i.e. 3.8 basis points higher than on bills with a similar tenor issued on May 25, 2012, representing a bid price of 99.3795 per 100 nominal.

During the week under review, Treasury bill trading on the Malta Stock Exchange amounted to €0.04 million and was conducted by the Central Bank of Malta in its role as market-maker.

On Tuesday, the Treasury invited tenders for 90-day and 182-day bills maturing on September 20 and December 21, 2012, respectively.