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Money market report for the week ended April 5

ECB decisions

On Thursday, April 4, the Governing Council of the European Central Bank (ECB) decided to keep the interest rate on the main refinancing operations (MRO) unchanged at 0.75 per cent. Interest rates on the marginal lending facility and on the deposit facility were also left unchanged at 1.50 per cent and 0.00 per cent, respectively.

ECB monetary operations

On Thursday, March 28, the ECB announced its weekly MRO. The auction was conducted on Tuesday, April 2, and attracted bids from euro area eligible counterparties of €124.88 billion, €1.64 billion higher than the bid amount in the previous week. The amount was allotted in full at a fixed rate equivalent to the prevailing MRO rate of 0.75 per cent, in accordance with current ECB policy.

On Tuesday, April 2, 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, March 29. 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 €270.44 billion, with the ECB allotting €205.5 billion or 75.99 per cent of the total bid amount. The marginal rate on the auction was set at 0.07 per cent, with the weighted average rate at 0.04 per cent.

On Wednesday, April 3, 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 $1.2 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 182-day bills maturing on October 4. Bids of €25.6 million were submitted, with the Treasury accepting the full amount. Since €38.85 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €13.25 million, to stand at €275.35 million.

The yield from the 182-day bill auction was 0.857 per cent, i.e. 8.8 basis points higher than on bills with a similar tenor issued on March 22, representing a bid price of 99.5686 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 and 182-day bills maturing on July 12 and October 11 respectively.

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