On Tuesday, June 17, 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 to continue to offer one-week US dollar liquidity-providing operations after July 31, 2014, until further notice.

In the future, the ECB will, on a regular basis, assess the need for US dollar liquidity-providing operations. It will take into account that recently-established standing swap lines have created a framework for the provision of US dollar liquidity to counterparties, if warranted by market conditions.

ECB monetary operations

On Monday, June 16, 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 €97.89 billion, €38.88 billion lower 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 0.15 per cent, in accordance with current ECB policy.

On Wednesday, June 18, 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 0.60 per cent and once again 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 182-day bills maturing on July 18 and December 19, respectively. Bids of €18 million were submitted for the 28-day bills, with the Treasury accepting €5 million, while bids of €25 million were submitted for the 182-day bills, with the Treasury accepting €15 million. Since €10 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €10 million, to stand at €398.87 million.

The yield from the 28-day bill auction was 0.179 per cent, i.e. 10.60 basis points lower than on bills with a similar tenor issued on May 16, representing a bid price of 99.9861 per 100 nominal. The yield from the 182-day bill auction was 0.395 per cent i.e. 0.40 basis point lower than on bills with a similar tenor issued on June 13, representing a bid price of 99.8007 per 100 nominal.

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

Today the Treasury will invite tenders for 28-day and 180-day bills maturing on July 25 and December 24, respectively.

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