Money market report for the week ended February 17
ECB monetary operations
On Monday, February 13, the ECB announced its weekly Main Refinancing Operation. The auction was conducted on Tuesday, February 14 and attracted bids from euro area eligible counterparties of €142.75 billion, €33.29 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 one per cent, in accordance with current ECB policy.
On Tuesday, February 14, the ECB conducted a Special Term Refinancing Operation with a maturity of 28 days. This attracted bids of €14.33 billion which were allotted in full at a fixed rate equivalent to the prevailing main refinancing rate of one per cent, also in accordance with current ECB policy.
Also, on Tuesday, February 14, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €219.50 billion. This operation was designed to sterilise the effect of purchases made under the Securities Markets Programme that were settled but had not yet matured by the previous Friday, February 10.
The auction was carried out at a variable rate, with euro area eligible counterparties allowed to place up to four bids at a maximum rate of one per cent. It attracted bids amounting to €351.86 billion, with the ECB allotting €219.50 billion, or 62.38 per cent of the total amount bid for. The marginal rate on the auction was set at 0.28 per cent, with the weighted average rate at 0.27 per cent.
On Wednesday, February 15, the ECB conducted a seven-day US dollar funding operation through collateralised lending in conjunction with the US Federal Reserve. This operation attracted bids of $3.70 billion, which were allotted in full at a fixed rate of 0.63 per cent.
Domestic Treasury bill market
In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day and 182-day bills maturing on May 18 and August 17, respectively. Bids of €24.6 million were submitted for the 91-day bills, with the Treasury accepting only €1.6 million, while bids of €20 million were submitted for the 182-day bills, with the Treasury rejecting all. Since no bills matured during the week, the outstanding balance of Treasury bills increased by €1.6 million, to stand at €196.36 million.
The yield from the 91-day bill auction was 0.889 per cent, i.e. 0.1 basis points lower than on bills with a similar tenor issued on February 9, representing a bid price of 99.7758 per 100 nominal.
During the week under review, there was no trading on the Malta Stock Exchange.
Today, the Treasury will invite tenders for 91-day bills and 182-day bills maturing on May 25 and August 24, respectively.