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Money market report for the week ended January 25

ECB monetary operations

On Monday, January 21, the ECB announced its weekly main refinancing operation. The auction was conducted on Tuesday, January 22, and attracted bids from euro area eligible counterparties of €125.30 billion, €5.94 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, January 22, the ECB also conducted an auction for a seven-day fixed-term deposit intended to absorb €208.5 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, January 18.

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 €298.93 billion with the ECB allotting €208.5 billion or 69.75 per cent of the total bid amount. The marginal rate on the auction was once again set at 0.01 per cent, with the weighted average rate also set at 0.01 per cent.

On Wednesday, January 23, 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 $0.02 billion, which 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 April 26 and July 26, respectively. Bids of €27.4 million were submitted for the 91-day bills with the Treasury accepting €21 million, while bids of €24.11 million were submitted for the 182-day bills, with the Treasury accepting the full amount. Since €15 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €30.11 million, to stand at €270.35 million.

The yield from the 91-day bill auction was 0.758 per cent, i.e. a 0.9 basis point lower than that on bills with a similar tenor issued on January 18, 2013, representing a bid price of 99.8088 per 100 nominal. The yield from the 182-day bill auction was 0.847per cent, i.e. one basis point higher than on bills with a similar tenor issued on January 18, 2013, representing a bid price of 99.5736 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 maturing on May 3.

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