On Thursday, April 2, the Governing Council of the European Central Bank reduced the minimum bid rate on its main refinancing operations by 25 basis points to 1.25 per cent with effect from tomorrow, the settlement date for this week's Main Refinancing Operation. Accordingly, with effect from the same date, the ECB also reduced the rate on the marginal lending facility by 25 basis points to 2.25 per cent and the rate on the overnight deposit facility by the same amount to 0.25 per cent. This left the corridor applicable to the ECB's standing facilities at 200 basis points around the interest rate on the MRO.
On Monday, March 30, the ECB announced its weekly MRO. This attracted bids for €238.07 billion from euro area eligible counterparties, which amount was allotted in full at a fixed rate equivalent to the prevailing main refinancing rate of 1.50 per cent.
On the same day, the Eurosystem and the Swiss National Bank conducted a EUR/CHF foreign exchange swap, with a seven-day maturity, to provide Swiss franc liquidity against the euro. This operation attracted bids for €49.72 billion. As this exceeded the intended volume of €25 billion, participating counterparties received 50.28 per cent of the amounts bid for. This operation was conducted at a fixed price of -3.36 swap points.
On Wednesday, April 1, the ECB, in conjunction with the US Federal Reserve, conducted another US dollar funding operation, this time for a tenor of seven days. This attracted bids for $93.08 billion, which amount was again allotted in full at a fixed rate of 1.21 per cent.
In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day bills maturing on July 3 and 182-day bills maturing on October 2. Bids for €83.12 million were submitted for the 91-day bills, with the Treasury accepting €51.15 million, while bids for €14.53 million were submitted for the 182-day bills, with the Treasury accepting €8.31 million. Since €42.20 million worth of bills matured during the week, the outstanding balance of Treasury Bills increased by €17.30 million to €559.90 million.
The yield resulting from the 91-day bill auction was 2.152 per cent, 3.4 basis points lower than that on bills with a similar tenor issued on March 20. The latest yield on such bills represented a bid price of 99.4590 per 100 nominal. The yield resulting from the 182-day bill auction was 2.343 per cent, that is, three basis points higher than that on bills with a similar tenor issued on March 27. The yield on these bills represented a bid price of 98.8293 per 100 nominal.
Today the Treasury will invite tenders for 183-day bills maturing on October 9.
Treasury bill trading on the Malta Stock Exchange amounted to €2.78 million during the week, with all trades being conducted by the Central Bank of Malta in its role as market maker.