Money market report for week ended June 29
ECB monetary operations
On Monday, June 25, the ECB announced its weekly Main Refinancing Operation (MRO). The auction was conducted on Tuesday, June 26, and attracted bids from euro area eligible counterparties of €180.38 billion, €13.13 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.
Also on Tuesday, June 26, the ECB 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 22.
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 €288.43 billion, with the ECB allotting €210.5 billion, or 72.98 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 27, the ECB conducted a three-month Longer-Term Refinancing Operation to be settled as a fixed rate tender procedure with full allotment, with the rate fixed at the average rate of the MROs over the life of the operation.
The auction attracted bids of €26.30 billion from euro area eligible counterparties, which amount was allotted in full, in accordance with current ECB policy.
Also, on Wednesday, 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 $2.56 billion, which was allotted in full at a fixed rate of 0.66 per cent.
Domestic Treasury bill market
In the domestic primary market for Treasury bills, the Treasury invited tenders for 92-day and 183-day bills maturing on September 28 and December 28, respectively.
Bids of €2.9 million were submitted for the 92-day bills, while bids of €2 million were submitted for the 183-day bills with the Treasury accepting the full amount in both tenors. Since €13.8 million worth of bills matured in the week, the outstanding balance of Treasury bills decreased by €8.90 million, to stand at €256.05 million.
The yield from the 92-day bill auction was 1.040 per cent, i.e. 0.1 basis point lower than that on bills with a similar tenor issued on June 22, representing a bid price of 99.7349 per 100 nominal.
The yield from the 183-day bill auction was 1.190 per cent, i.e. one basis point lower than on bills with a similar tenor issued on June 22, representing a bid price of 99.3987 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 October 5, and January 4, 2013, respectively.