Money market report

ECB Monetary Operations

On Monday, August 6, the ECB announced its weekly Main Refinancing Operation.  The auction was conducted on Tuesday, August 7, and attracted bids from euro area eligible counterparties of €133.43 billion, €0.66 billion higher 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 0.75%, in accordance with current ECB policy.

On Tuesday, August 7, the ECB conducted a Special-Term Refinancing Operation with a maturity of 35 days. This attracted bids of €25.18 billion, which was allotted in full at a fixed rate equivalent to the prevailing main refinancing rate of 0.75%, also in accordance with the current ECB policy.

Also on Tuesday, August 7, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €211.5 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, August 03.  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 0.75%. It attracted bids amounting to €419.96 billion, with the ECB allotting €211.5 billion or 50.36% of the total bid amount. The marginal rate on the auction was set at 0.01%, with the weighted average rate at 0.01%.

On Wednesday, August 8, 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 $7.0 billion, which 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 28-day, 91-day and 182-day bills maturing on September 7 and November 9, 2012 and on February 8, 2013, respectively. Bids of €15.85 million were submitted for the 28-day bills, with the Treasury accepting €14.6 million, bids of €8.83 million were submitted for the 91-day bills with the Treasury accepting €8.5 million, while one bid of €3.0 million was submitted for the 182-day bills with the Treasury accepting the full amount. Since €22.0 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €4.10 million, to stand at €282.66 million.

The yield from the 28-day bill auction was 1.079%, i.e. 5.2 basis points higher than that on bills with a similar tenor issued on August 3, 2012, representing a bid price of 99.9161 per 100 nominal.  The yield from the 91-day bill auction was 1.184%, i.e. 5.6 basis points higher than on bills with a similar tenor issued on August 3, 2012, representing a bid price of 99.7016 per 100 nominal.  The yield from the 182-day bill auction was 1.250%, i.e. 4.2 basis points higher than on bills with a similar tenor issued on July 27, 2012, representing a bid price of 99.3720 per 100 nominal. 

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

On Tuesday, the Treasury invited tenders for 28-day bills and 91-day bills maturing on September 14 and November 16, 2012, respectively.