Money market report for week ended June 22
ECB monetary operations
On Monday, June 18, the ECB announced its weekly Main Refinancing Operation. The auction was conducted on Tuesday, June 19, and attracted bids from euro area eligible counterparties of €167.25 billion, €35.51 billion higher than the bid amount in the previous week. The 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, June 19, the ECB also conducted an auction for a seven-day fixed-term deposit intended to absorb €210.5 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, June 15. 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 €387.53 billion, with the ECB allotting €210.5 billion or 54.32 per cent of the total bid amount. The marginal rate on the auction was set at 0.26 per cent, with the weighted average rate at 0.26 per cent.
On Wednesday, June 20, 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 $1.6 billion, which was allotted in full at a fixed rate of 0.66 per cent.
On the same day, the ECB, in conjunction with the US Federal Reserve, conducted an 84-day US dollar funding operation through collateralised lending. This attracted bids of $9.94 billion, which amount was allotted in full at a fixed rate of 0.67 per cent.
Domestic Treasury bill market
In the domestic primary market for Treasury bills, the Treasury invited tenders for 90-day and 182-day bills maturing on September 20 and December 21, respectively. Bids of €3.3 million were submitted for the 90-day bills, with the Treasury accepting €3 million, while bids of €0.4 million were submitted for the 182-day bills with the Treasury accepting the full amount. Since €2.25 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €1.15 million, to stand at €264.95 million.
The yield from the 90-day bill auction was 1.041 per cent, i.e. 1.2 basis points higher than that on bills with a similar tenor issued on June 15, representing a bid price of 99.7404 per 100 nominal. The yield from the 182-day bill auction was 1.200 per cent, i.e. 3.5 basis points lower than on bills with a similar tenor issued on June 15, representing a bid price of 99.3970 per 100 nominal.
During the week under review, Treasury bill trading on the Malta Stock Exchange amounted to €0.30 million and was conducted by the Central Bank of Malta in its role as market-maker.
Today, the Treasury will invite tenders for 92-day bills and 183-day bills maturing on September 28 and December 28, respectively.