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Money market report for the week ended October 12

ECB monetary operations

On Monday, October 8, the ECB announced its weekly Main Refinancing Operation. The auction was conducted on Tuesday, October 9, and attracted bids from euro area eligible counterparties of €89.78 billion, €13.10 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 the current ECB policy.

On Tuesday, October 9, the ECB conducted a Special-Term Refinancing Operation with a maturity of 35 days. This attracted bids of €12.63 billion, which was allotted in full at a fixed rate equivalent to the prevailing main refinancing rate of 0.75 per cent, also in accordance with the current ECB policy.

Also on Tuesday, October 9, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €209.5 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, October 5.

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 €444.98 billion with the ECB allotting €209.5 billion, or 47.08 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 10, 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 $3.56 billion, which was allotted in full at a fixed rate of 0.65 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 $1.14 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 91-day and 182-day bills maturing on January 11 and April 12, respectively. Bids of €33.41 million were submitted for the 91-day bills with the Treasury accepting €4.1 million. Bids of €5 million were submitted for the 182-day bills, with the Treasury rejecting all. Since €16 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €11.94 million, to stand at €298.94 million.

The yield from the 91-day bill auction was 1.210 per cent, i.e. five basis points lower than on bills with a similar tenor issued on October 5, representing a bid price of 99.6951 per 100 nominal.

During the week under review, Treasury bill trading on the Malta Stock Exchange amounted to €0.14 million and was conducted by the Central Bank of Malta in its role as market-maker.

Today, the Treasury will invite tenders for 28-day bills and 91-day bills maturing on November 16, and on January 18, respectively.

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