Domestic Treasury bill rate down slightly

On Monday, July 14, the European Central Bank (ECB) announced its weekly Main Refinancing Operation (MRO). This attracted bids for €265.9 billion from euro area eligible counterparties, with the ECB allotting €155 billion, or 58.3 per cent of the total amount bid for. The marginal rate on the operation, that is the minimum rate at which the tender allotment was exhausted, was set at 4.34 per cent, two basis points higher than the marginal rate resulting from the MRO of the previous week.

On Friday, July 11, 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 $90.1 billion, of which $25 billion was allotted at a fixed rate of 2.30 per cent, equivalent to the marginal rate on the Federal Reserve System's tender.

In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day bills maturing on October 17. Bids for €78.28 million were submitted, with the Treasury accepting €15.54 million. Since €16.2 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €0.7 million to €434.44 million.

The yield resulting from the auction was 4.901 per cent, 2.6 basis points lower than that on bills with a similar tenor issued on July 4. The latest yield represented a bid price of 98.7763 per 100 nominal.

Today, the Treasury will invite tenders for 91-day bills maturing on October 24.

Treasury bill trading on the Malta Stock Exchange amounted to €2.9 million, while off-Exchange transactions amounted to €71,000. Most of the trades were conducted by the Central Bank of Malta in its role as market maker.