On June 8, the Governing Council of the European Central Bank (ECB) decided that the interest rate on the main refinancing operations (MRO) and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at zero per cent, 0.25 per cent and -0.40 per cent, respectively.
The Governing Council expects the key ECB interest rates to remain at their present levels for an extended period of time, and well past the horizon of the net asset purchases.
Regarding non-standard monetary policy measures, the Governing Council confirms that the net asset purchases, at the current monthly pace of €60 billion, are intended to run until the end of December, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim.
The net purchases will be made alongside reinvestments of the principal payments from maturing securities purchased under the asset purchase programme. If the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, the Governing Council stands ready to increase the programme in terms of size and/or duration.
ECB monetary operations
On June 5, the ECB announced its weekly MRO. The operation was conducted on June 6 and attracted bids from euro area eligible counterparties of €12.11 billion, €0.03 billion higher 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 zero per cent, in accordance with current ECB policy.
On June 7, the ECB conducted a seven-day US dollar funding operation through collateralised lending in conjunction with the US Federal Reserve. This operation attracted bids of $0.04 billion, which was allotted in full at a fixed rate of 1.44 per cent.
Domestic Treasury bill market
In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day and 182-day bills for settlement value June 8, maturing on September 7, and December 7 respectively. Bids of €12 million were submitted for the 91-day bills, with the Treasury accepting €2 million, while bids of €5 million were submitted for the 182-day bills, with the Treasury accepting also €2 million. Since €10 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €6 million, to stand at €202 million.
The yield from the 91-day bill auction was -0.329 per cent, up by 0.1 basis point from bids with a similar tenor issued on June 1, representing a bid price of €100.0832 per €100 nominal. The yield from the 182-day bill auction was -0.280 per cent, up by 2.0 basis points from bids with a similar tenor issued on June 1, representing a bid price of €100.1418 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 September 14, and December 14 respectively.