Money market report for week ended June 24
ECB Monetary Operations
On June 20, the ECB announced its weekly Main Refinancing Operation. The auction was conducted on June 21, and attracted bids from euro area eligible counterparties of €186.94 billion, €51.36 billion higher 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 1.25 per cent, in accordance with current ECB policy. Also on June 21, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €74 billion. This operation is designed to sterilise the effect of purchases made under the Securities Markets Programme that were settled but had not yet matured by June 17.
The auction was carried out at a variable rate, with euro area eligible counterparties allowed to place up to two bids at a maximum rate of 1.25 per cent. It attracted bids amounting to €83.56 billion, with the ECB allotting €74 billion or 88.5 per cent of the total amount bid for. The marginal rate on the auction was set at 1.24 per cent, with the weighted average rate at 1.15 per cent.
On June 22, the ECB conducted a seven-day US dollar funding operation through collateralised lending in conjunction with the US Federal Reserve. This operation was carried out at a fixed rate of 1.10 per cent and, once more, no bids were placed by euro area eligible counterparties.
Domestic Treasury Bill Market
In the domestic primary market for Treasury Bills, the Treasury invited tenders for 91-day and 273-day Bills maturing on September 23, 2011 and March 23, 2012 respectively. Bids of €23.15 million were submitted for the 91-day Bills, with the Treasury accepting €7.6 million, while bids of €21.6 million were submitted for the 273-day bills, with the Treasury accepting €3.0 million. Since €18.0 million worth of bills matured during the week, the outstanding balance of Treasury Bills decreased by €7.4 million, to stand at €337.13 million.
The yield from the 91-day bill auction was 1.104 per cent, i.e. 2.6 basis points lower than that on Bills with a similar tenor issued on June 17, 2011, representing a bid price of 99.7217 per 100 nominal. The yield from the 273-day bill auction was 1.500 per cent, i.e. 18.1 basis points lower than that on Bills with a similar tenor issued on May 06, 2011, representing a bid price of 98.8753 per 100 nominal.
During the week under review, trading on the Malta Stock Exchange amounted to €0.08 million and was conducted off-exchange by the Central Bank of Malta in its role as market-maker.
Today the Treasury will invite tenders for 91-day bills maturing on September, 30.