On March 8, the Governing Council of the European Central Bank 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, 0.25 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 €30 billion, are intended to run until the end of September 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 Eurosystem will reinvest the principal payments from maturing securities purchased under the asset purchase programme for an extended period of time after the end of its net asset purchases and, in any case, for as long as necessary. This will contribute both to favourable liquidity conditions and to an appropriate monetary policy stance.

ECB monetary operations

On March 5, the ECB announced its weekly MRO. The operation was conducted on March 6 and attracted bids from euro area eligible counterparties of €1.15 billion, €0.57 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 zero per cent, in accordance with current ECB policy.

On March 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 $0.06 billion, which was allotted in full at a fixed rate of 1.92 per cent.

Domestic Treasury bill market

In the domestic primary market for Treasury bills, the Treasury invited tenders 90-day and 182-day bills for settlement value March 8, maturing on June 6 and September 6, respectively. Bids of €35 million were submitted for the 90-day bills, with the Treasury accepting €17 million, while €35 million were also submitted for the 182-day bills, with the Treasury accepting €3 million. Since €17.50 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €2.50 million, to stand at €213.50 million.

The yield from the 90-day bill auction was -0.366 per cent, up by 1.3 basis points from bids with a similar tenor issued on March 1, representing a bid price of €100.0916 per €100 nominal. The yield from the 182-day bill auction was -0.361 per cent, up by 0.6 basis points from bids with a similar tenor issued on February 22, representing a bid price of €100.1828 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 June 14 and September 13, respectively.

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