Money market report for the week ended February 15
ECB monetary operations
On Monday, February 11, the European Central Bank (ECB) announced its weekly main refinancing operation. The auction was conducted on Tuesday, February 12, and attracted bids from euro area eligible counterparties of €128.68 billion, €0.63 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, February 12, the ECB conducted a special-term refinancing operation with a maturity of 28 days. This attracted bids of €7.76 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, February 12, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €205.5 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, February 8. 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 €349.54 billion with the ECB allotting €205.5 billion, or 58.79 per cent of the total bid amount. The marginal rate on the auction was set at 0.06 per cent, with the weighted average rate set at 0.04 per cent.
On Wednesday, February 13, the ECB conducted a seven-day US dollar fundingoperation through collateralised lending in conjunction with the US Federal Reserve. This operation attracted bids of $1 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 and 182-day bills maturing on May 17 and August 16, respectively. Bids of €31.9 million were submitted for the 91-day bills with the Treasury accepting only €1 million, while bids of €27.25 million were submitted for the 182-day bills, with the Treasury accepting only €1.05 million. Since no maturing Treasury bills were recorded during the week, the outstanding balance of Treasury bills increased by €2.05 million, to stand at €283.80 million.
The yield from the 91-day bill auction was 0.770 per cent, i.e. 0.7 basis point higher than that on bills with a similar tenor issued on February 8, representing a bid price of 99.8057 per 100 nominal. The yield from the 182-day bill auction was 0.800 per cent, i.e. 4.7 basis points lower than on bills with a similar tenor issued on January 25, representing a bid price of 99.5972 per 100 nominal.
During the week under review, Treasury bill trading on the Malta Stock Exchange amounted to €1.05 million and was conducted by the Central Bank of Malta in its role as market maker. Today the Treasury will invite tenders for 91-day bills and 273-day bills maturing on May 24 and November 22, respectively.