Money market report for the week ended February 22

On Monday, February 18, the European Central Bank (ECB) announced its weekly main refinancing operation. The auction was conducted the following day and attracted bids from euro area eligible counterparties of €132.17 billion, €3.49 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, February 19, the ECB also 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 15. 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 €349.19 billion with the ECB allotting €205.5 billion, or 58.85 per cent of the total bid amount. The marginal rate on the auction was set at 0.04 per cent, with the weighted average rate set at 0.03 per cent.

On Wednesday, February 20, the ECB conducted a seven-day US dollar funding operation through collateralised lending in conjunction with the US Federal Reserve. This operation was carried out at a fixed rate of 0.65 per cent and no bids were placed by euro area eligible counterparties.

Domestic Treasury bill market

In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day and 273-day bills maturing on May 24 and November 22, respectively. Bids of €36.4 million were submitted for the 91-day bills, with the Treasury accepting only €5.4 million, while bids of €16.25 million were submitted for the 273-day bills, with the Treasury accepting €6 million.

Since €1.05 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €10.35 million, to stand at €294.15 million.

The yield from the 91-day bill auction was 0.769 per cent, i.e. 0.1 basis point lower than on bills with a similar tenor issued on February 15, representing a bid price of 99.8060 per 100 nominal. The yield from the 273-day bill auction was 0.855 per cent, i.e. 44.3 basis points lower than on bills with a similar tenor issued on November 2, 2012, representing a bid price of 99.3558 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 31.