Money market report for week ended August 17

On Monday, August 13, the ECB announced its weekly Main Refinancing Operation.

The auction was conducted on Tuesday, August 14, and attracted bids from euro area eligible counterparties of €130.58 billion, €2.85 billion lower 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 0.75 per cent, in accordance with current ECB policy.

On Tuesday, August 14, the ECB also conducted an auction for a seven-day fixed-term deposit intended to absorb €211.5 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, August 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 0.75 per cent. It attracted bids amounting to €419.50 billion, with the ECB allotting €211.5 billion or 50.42 per cent of the total bid amount. The marginal rate on the auction was set at 0.01 per cent, with the weighted average rate also set at 0.01 per cent.

On Wednesday, August 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 $9.26 billion, which was allotted in full at a fixed rate of 0.64 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 $4.49 billion, which amount was allotted in full at a fixed rate of 0.64 per cent.

Domestic Treasury bill market

In the domestic primary market for Treasury bills, the Treasury invited tenders for 28-day and 91-day bills maturing on September 14 and November 16, respectively.

Bids of €5.33 million were submitted for the 28-day bills, with the Treasury accepting the full amount, while bids of €16.15 million were submitted for the 91-day bills, with the Treasury accepting €12.15 million.

Since €17 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €0.48 million, to stand at €283.14 million.

The yield from the 28-day bill auction was 1.099 per cent, i.e. 2.0 basis points higher than on bills with a similar tenor issued on August 10, representing a bid price of 99.9146 per 100 nominal.

The yield from the 91-day bill auction was 1.208 per cent, i.e. 2.4 basis points higher than on bills with a similar tenor issued on August 10, 2012, representing a bid price of 99.6956 per 100 nominal.

During the week under review, Treasury bill trading on the Malta Stock Exchange amounted to €0.12 million and was conducted by the Central Bank of Malta in its role as market-maker.

Today, the Treasury will invite tenders for 27-day and 91-day bills maturing on September 20 and on November 23 respectively.