On Friday, January 24, the Governing Council of the European Central Bank (ECB), in cooperation with the Bank of England, the Bank of Japan and the Swiss National Bank, decided on the future conduct of US dollar liquidity-providing operations. These central banks will continue to conduct US dollar liquidity-providing operations with a maturity of three months until April 30. US dollar liquidity-providing operations with a maturity of one week will continue to be conducted at least until July 31.

ECB monetary operations

On Monday, January 20, the ECB announced its weekly main refinancing operation (MRO). The auction was conducted the following day and attracted bids from euro area eligible counterparties of €116.28 billion, €21.54 billion higher than the bid amount of the previous week. The amount was allotted in full at a fixed rate equivalent to the prevailing MRO rate of 0.25 per cent, in accordance with current ECB policy.

Also on Tuesday, January 21, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €177.5 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 17. 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 0.25 per cent. It attracted bids amounting to €152.07 billion, with the ECB allotting the full amount. The marginal rate on the auction was set at 0.25 per cent, with the weighted average rate at 0.23 per cent.

On Wednesday, January 22, 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 0.58 per cent and did not attract bids from euro area eligible counterparties.

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 February 21 and April 25, respectively. Bids of €33 million were submitted for the 28-day bills, with the Treasury accepting €7 million, while bids of €41 million were submitted for the 91-day bills, with the Treasury accepting €29 million. Since €2 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €34 million, to stand at €276.17 million.

The yield from the 28-day bill auction was 0.289 per cent, i.e. 6.0 basis points lower than on bills with a similar tenor issued on January 3, representing a bid price of 99.9775 per 100 nominal. The yield from the 91-day bill auction was 0.317 per cent, i.e. 0.2 basis points higher than on bills with a similar tenor issued on January 17, representing a bid price of 99.9199 per 100 nominal.

During the week under review, there was no trading on the Malta Stock Exchange.

Today the Treasury will invite tenders for 182-day bills maturing on August 1.

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