On Thursday, April 21, the Governing Council of the European Central Bank decided that the interest rate on the main refinancing operations (MRO), the marginal lending facility and the deposit facility will remain unchanged at 0.00 per cent, 0.25 per cent and -0.40 per cent, respectively.
Also on Thursday, April 21, the Governing Council of the ECB defined the main technical parameters of the corporate sector purchase programme (CSPP) as follows:
• the Eurosystem’s collateral framework will be the basis for determining the eligibility of corporate sector securities;
• the programme will start in June 2016;
• the purchases will be carried out by six national central banks acting on behalf of the Eurosystem and coordinated by the ECB;
• the purchases will be conducted in primary and secondary markets, but no primary market purchases will involve debt instruments issued by entities that qualify as public undertakings;
• debt instruments will be eligible for purchases, provided they fulfill a list of eligible criteria;
• purchases under the CSPP will be conducted with counterparties that are eligible for the Eurosystem’s monetary policy operations, or with counterparties that are used by the Eurosystem for the investment of its euro-denominated portfolios;
• the Eurosystem will limit each share issue to 70 per cent of the international securities identification number (ISIN) on the basis of the outstanding amount;
• a benchmark will be defined at issuer group level and it will be neutral to proportionally reflect all outstanding issues which qualify for it.
ECB monetary operations
On Monday, April 18, the ECB announced its weekly MRO. The operation was conducted on Tuesday, April 19, and attracted bids from euro area eligible counterparties of €54.02 billion, €1.69 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 0.00 per cent, in accordance with current ECB policy.
On Wednesday, April 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 0.84 per cent and did not attract any bids from euro area eligible counterparties.
Domestic Treasury Bill Market
In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day and 182-day bills maturing on July 21 and October 20, respectively. Bids of €62 million were submitted for the 91-day bills, with the Treasury accepting €18 million, while bids of €50 million were submitted for the 182-day bills, with the Treasury accepting €5 million. Since €28 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €5 million, to stand at €332.65 million.
The yield from the 91-day bill auction was -0.179 per cent, down by 0.9 basis point from bids with a similar tenor issued on April 14, representing a bid price of 100.0453 per 100 nominal. The yield from the 182-day bill auction was -0.150 per cent, down by 4.0 basis points from bids with a similar tenor issued on April 7, representing a bid price of 100.0759 per 100 nominal.
Morevoer, 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 July 28.