Decrease in 91-day Treasury Bill rate

On August 16, the ECB announced its weekly MRO. The auction was conducted on August 17, and attracted bids from euro area eligible counterparties of €155.23 billion, €1.48 billion more than the amount bid for the previous week. The bid amount was allotted in full at a fixed rate equivalent to the prevailing main refinancing rate of one per cent, in accordance with current ECB policy.

On August 17, the ECB also conducted an auction for a seven-day, fixed-term deposit intended to absorb €60.5 billion. The operation was designed to sterilise the effect of purchases made under the Securities Market Programme and settled by August 13.

The auction was carried out at a variable rate with euro area eligible counterparties, which were allowed to place up to two bids at a maximum rate of one per cent. It attracted bids amounting to €128.99 billion. The ECB allotted the full intended volume of €60.5 billion, or 46.9 per cent of the total amount bid for. The marginal rate on the auction was set at 0.4 per cent, with the weighted average rate standing at 0.39 per cent.

On August 18 the ECB conducted a seven-day US dollar funding operation through collateralised lending in conjunction with the US Federal Reserve.

This attracted bids for $0.35 billion, which was allotted in full at a fixed rate of 1.19 per cent.

Meanwhile, in the domestic primary market for Treasury Bills, the Treasury invited tenders for 91-day bills maturing on November 19. Bids of €108.37 million were submitted, with the Treasury accepting just €4 million. Since €9 million worth of bills matured during the week, the outstanding balance of Treasury Bills decreased by €5 million, to stand at €514.28 million.

The yield from the 91-day bill auction was 0.85 per cent, i.e. 13.1 basis points lower than on bills with a similar tenor issued on August 13. The yield on these bills represented a bid price of 99.7856 per 100 nominal.

During the week, no secondary market trading was recorded on the Malta Stock Exchange.

Today the Treasury will invite tenders for 91-day bills maturing on November 26.


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