Increase in outstanding amount of Treasury bills

On Monday, June 2, the European Central Bank (ECB) announced its weekly Main Refinancing Operation (MRO). This operation attracted bids for €210.1 billion from euro area eligible counterparties, with the ECB allotting €153 billion, or 72.8 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 4.17 per cent, two basis points lower than the marginal rate resulting from the MRO of the previous week.

On Friday, May 30, the ECB also announced that, once again, in conjunction with the US Federal Reserve, it would 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. The operation attracted bids for $64.9 billion, of which $25 billion was allotted at a fixed rate of 2.26 per cent, equivalent to the Marginal Rate of the Federal Reserve System's tender.

In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day bills maturing on September 5. Bids for €51.14 million were submitted, with the Treasury accepting €39.79 million. Since €20.18 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €19.6 million to €378.68 million.

The yield resulting from the auction was 4.807 per cent, 13.3 basis points higher than that on bills with a similar tenor issued on May 16. The latest yield represented a bid price of 98.7995 per 100 nominal.

Today, the Treasury will invite tenders for 91-day bills maturing on September 12, and the following week it will invite tenders for 182-day bills maturing on December 19.

Treasury bill trading on the Malta Stock Exchange amounted to €2.96 million, with all trades being conducted by the CBM in its role as market maker.