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Yield resulting from 91-day Treasury bills auction falls to a new record low

On Monday, March 8, the European Central Bank (ECB) announced its weekly Main Refinancing Operation (MRO).

This auction, which was conducted on Tuesday, attracted bids for €78.40 billion from euro area eligible counterparties, €2.06 billion less than the amount bid for in the previous week. The bid amount was allotted in full at a fixed rate equivalent to the prevailing main refinancing rate of one per cent in accordance with the current ECB policy.

On Tuesday, March 9, the ECB conducted a Special Term Refinancing Operation (STRO) with a maturity of 35 days. This attracted bids for €9.31 billion, with bids again being allotted in full at a fixed rate equivalent to the prevailing main refinancing rate of one per cent in accordance with the current ECB policy.

On the same day, it being the end of the reserve deposit maintenance period, the ECB also conducted an overnight Fine-tuning Liquidity Absorbing Operation. This was carried out at a variable rate, with counterparties allowed to place up to two bids at a maximum of one per cent. The operation attracted bids for €295.46 billion, of which the ECB accepted €294.49 billion, or 99.67 per cent of the total amount bid for. The marginal rate on this operation was set at 0.80 per cent, while the weighted average rate was 0.76 per cent.

In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day bills maturing on June 11. Bids for €100.96 million were submitted, with the Treasury allotting €20 million.

Since no bills matured during the week, the outstanding balance of Treasury bills increased by €20 million to €508.66 million.

The yield resulting from the auction was 0.925 per cent, i.e. 6.5 basis points less than that on bills with a similar tenor issued on March 5 and a new record low. It represented a bid price of 99.7667 per 100 nominal.

Treasury bill trading on the Malta Stock Exchange amounted to €3.02 million during the week, with €0.12 million trades being conducted by the Central Bank of Malta in its role as market maker. Concurrently, off-exchange transactions amounted to €2.89 million, with all trades being transacted by other brokers.

Today, the Treasury will invite tenders for 92-day bills maturing on June 18.

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