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Money market report for the week ending August 31

ECB monetary operations

On August 27, the European Central Bank (ECB) announced its weekly main refinancing operation (MRO). The operation was conducted on August 28, and attracted bids from euro area eligible counterparties of €2.54 billion, €0.25bn 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 August 29, 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 €1.45 billion from euro area eligible counterparties.

The amount was allotted in full in accordance with current ECB policy. Also on August 29, 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 $0.09 billion, which was allotted in full at a fixed rate of 2.42 per cent.

Domestic Treasury Bill market

In the domestic primary market for Treasury bills, the Treasury invited tenders for 28-day and 91-day bills for settlement value August 30, maturing on September 27, and November 29, respectively. Bids of €25.50 million were submitted for the 28-day bills, with the Treasury accepting €3m, while bids of €27m were submitted for the 91-day bills, with the Treasury accepting €20m. Since €28.10 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €5.10m, to stand at €351.50m.

The yield from the 28-day bill auction was -0.356 per cent, unchanged from bids with a similar tenor issued on August 16, representing a bid price of €100.0277 per €100 nominal. The yield from the 91-day bill auction was also -0.356 per cent, up by 0.2 basis point from bids with a similar tenor issued on August 23, representing a bid price of €100.0901 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 December 6, 2018, and March 7, 2019, respectively.

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