On Thursday, September 4, the Governing Council of the European Central Bank (ECB) reduced the rate on its main refinancing operations (MRO) by 10 basis points to 0.05 per cent with effect from tomorrow, September 10.

Furthermore, with effect from the same date, the ECB also reduced the rate on the marginal lending facility by 10 basis points to 0.30 per cent, and the overnight deposit rate by 10 basis points to -0.20 per cent.

ECB monetary operations

On Monday, September 1, the ECB announced its weekly MRO. The auction was conducted on Tuesday, September 2, and attracted bids from euro area eligible counterparties of €111.20 billion, €20.56 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, September 3, the ECB conducted a seven-day US dollar funding operation through collateralised lending in conjunction with the US Federal Reserve. This operation attracted one bid of $0.08 billion, which was allotted in full at a fixed rate of 0.59 per cent.

Domestic Treasury bill market

In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day bills maturing on December 5. Bids of €36.00 million were submitted for the 91-day bills, with the Treasury accepting €5 million. Since €10 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €5 million, to stand at €347.07 million.

The yield from the 91-day bill auction was 0.175 per cent, i.e. 3.4 basis points lower than on bills with a similar tenor issued on August 29, representing a bid price of 99.9558 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 and 182-day bills maturing on December 12, 2014 and March 13, 2015, respectively.