Money market report for the week ended December 28, 2012

ECB monetary operations

On Thursday, December 27, the European Central Bank (ECB) announced its weekly main refinancing operation. The auction was conducted on Friday, December 28, and attracted bids from euro area eligible counterparties of €89.66 billion, €16.98 billion higher than the bid amount in the previous week. The amount was allotted in full at a fixed rate equivalent to the prevailing main refinancing rate of 0.75 per cent, in accordance with current ECB policy.

On Friday, December 28, the ECB also conducted an auction for a seven-day fixed-term deposit intended to absorb €208.5 billion. This operation was designed to sterilise the effect of purchases made under the Securities Markets Programme that were settled but had not yet matured by the previous Friday, December 21. The auction was carried out at a variable rate, with euro area eligible counterparties allowed to place up to four bids at a maximum rate of 0.75 per cent. It attracted bids amounting to €197.56 billion with the ECB allotting the full amount. The marginal rate on the auction was set at 0.75 per cent, with the weighted average rate set at 0.03 per cent.

Domestic Treasury bill market

In the domestic primary market for Treasury bills, the Treasury invited tenders for 90-day bills maturing on March 28, 2013. Bids of €69.22 million were submitted, with the Treasury rejecting all bids. Since €49.53 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by the same amount, to stand at €154.13 million.

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

Today, the Treasury will invite tenders for 91-day bills and 182-day bills maturing on April 5 and on July 5 respectively.


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