Money market report for the week ended October 5
On Thursday, October 4, the Governing Council of the ECB decided to keep the interest rate on the Main Refinancing Operations (MRO) unchanged at 0.75 per cent. Interest rates on the marginal lending facility and on the deposit facility were also left unchanged, at 1.50 per cent and 0.00 per cent, respectively.
ECB monetary operations
On Monday, October 1, the ECB announced its weekly MRO. The auction was conducted on Tuesday, October 2, and attracted bids from euro area eligible counterparties of €102.89 billion, €14.50 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, October 2, the ECB also conducted an auction for a seven-day fixed-term deposit intended to absorb €209 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, September 28. 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 €420.87 billion with the ECB allotting €209 billion, or 49.66 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, October 3, 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 $1.98 billion, which was allotted in full at a fixed rate of 0.65 per cent.
Domestic Treasury bill market
In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day, 182-day and 364-day bills maturing on January 4, April 5 and October 4, 2013, respectively. Bids of €25.18 million were submitted for the 91-day bills with the Treasury accepting only €1 million. Bids of €22 million were submitted for the 364-day bills, with the Treasury accepting only €5.5 million, whereas the Treasury did not receive any bids for the 182-day bills.
Since €16 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €9.5 million, to stand at €310.88 million.
The yield from the 91-day bill auction was 1.260 per cent, i.e. 0.8 basis point lower than on bills with a similar tenor issued on September 28, representing a bid price of 99.6825 per 100 nominal. The yield from the 364-day bill auction was 1.598 per cent, i.e. 19.8 basis points higher than on bills with a similar tenor issued on April 13, representing a bid price of 98.4099 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 January 11 and April 12, 2013, respectively.