Further increase in 91-day Treasury bill rate

On Monday, April 21, the European Central Bank (ECB) announced its weekly Main Refinancing Operation (MRO). This operation attracted bids for €218.4 billion from euro area eligible counterparties. The ECB allotted €173 billion, or 79.2 per cent of the total amount bid for. The marginal rate, which is the rate at which the total tender allotment is exhausted, was set by the ECB at 4.21 per cent, unchanged from the rate resulting from the MRO of the previous week.

On Friday, April 18, the ECB also announced that, once again, in conjunction with the Federal Reserve, it was to provide dollar liquidity to the market through the Term Auction Facility (TAF). This was in order to help satisfy the exceptional need for dollar funding and to facilitate the further normalisation of conditions in the international money market. This operation attracted bids for USD 30.13 billion, of which USD 15 billion, equivalent to 49.8 per cent of the total bid for, was allotted.

In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day bills maturing on July 25. Out of the €20.3 million worth of bids submitted, the Treasury accepted bids for €19.8 million. Since no Treasury bills matured during the week, the outstanding balance of Treasury bills rose to €351.6 million.

The yield resulting from the auction was 4.642 per cent, that is 13.8 basis points higher than that on bills with a similar tenor issued on April 18. The latest yield represented a bid price of 98.8402 per 100 nominal.

Today the Treasury will invite tenders for 91-day bills maturing August 1. The following week the Treasury will once again invite tenders for 182-day bills maturing on November 7.

Treasury bill trading on the Malta Stock Exchange amounted to €706,794, with the bank acting as market marker. No transactions were conducted off-exchange.