Money market report for the week ended October 19
ECB monetary operations
On Monday, October 15, the ECB announced its weekly Main Refinancing Operation. The auction was conducted on Tuesday, October 16, and attracted bids from euro area eligible counterparties of €91.81 billion, €2.03 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 0.75 per cent, in accordance with current ECB policy.
On Tuesday, October 16, the ECB also 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 12.
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 €418.99 billion with the ECB allotting €209.5 billion, or 50 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 17, 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 $2.86 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 28-day and 91-day bills maturing on November 16 and January 18, 2013, respectively.
Bids of €9 million were submitted for the 28-day bills, with the Treasury accepting €3 million. Bids of €60.65 million were submitted for the 91-day bills, with the Treasury accepting only €10.35 million. Since €30.46 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €17.11 million, to stand at €281.83 million.
The yield from the 28-day bill auction was 1.157 per cent, i.e. 0.2 basis point lower than on bills with a similar tenor issued on September 14, representing a bid price of 99.9101 per 100 nominal. The yield from the 91-day bill auction was 1.143 per cent, i.e. 6.7 basis points lower than on bills with a similar tenor issued on October 12, representing a bid price of 99.7119 per 100 nominal.
During the week under review, there was no trading on the Malta Stock Exchange.
Today, the Treasury will invite tenders for 28-day bills and 91-day bills maturing on November 23 and January 25, 2013, respectively.