On April 26, 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 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 €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 April 23, the ECB announced its weekly MRO. The operation was conducted on April 24 and attracted bids from euro area eligible counterparties of €2.80 billion, €1.16 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 April 25, the ECB conducted a three month, longer-term refinancing operation to be settled as a fixed rate tender procedure with full allotment, with the rate fixed at the average rate of the MROs over the life of the operation. The operation attracted bids of €2.28 billion from euro area eligible counterparties. The amount was allotted in full in accordance with current ECB policy.
Also on April 25, 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 $0.12 billion, which was allotted in full at a fixed rate of 2.19 per cent.
Domestic Treasury bill market
In the domestic primary market for Treasury bills, the Treasury invited tenders 91-day and 182-day bills for settlement value on April 26, maturing on July 26 and October 25, respectively. Bids of €45 million were submitted for the 91-day bills, with the Treasury accepting €17 million, while bids of €35 million were submitted for the 182-day bills, with the Treasury accepting €3 million. Since €10 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €10 million, to stand at €313 million.
The yield from the 91-day bill auction was -0.354 per cent, down by 0.2 basis point from bids with a similar tenor issued on April 19, representing a bid price of €100.0896 per €100 nominal. The yield from the 182-day bill auction was -0.356 per cent, down by 0.1 basis point from bids with a similar tenor also issued on April 19, 2018, representing a bid price of €100.1803 per €100 nominal.
During the week under review, there was no trading on the Malta Stock Exchange.
Yesterday, the Treasury invited tenders for 91-day and 182-day bills maturing on August 2 and November 1, respectively.