On October 25, 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 0.00 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 at least through the summer of 2019, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to, two per cent over the medium term.

Regarding non-standard monetary policy measures, the Governing Council will continue to make net purchases under the asset purchase programme (APP) at the new monthly pace of €15 billion until the end of December. The Governing Council anticipates that, subject to incoming data confirming the medium-term inflation outlook, net purchases will then end. The Governing Council intends to reinvest the principal payments from maturing securities purchased under the APP for an extended period of time after the end of the net asset purchases, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation.

ECB monetary operations

On October 22, the ECB announced its weekly MRO. The operation was conducted on October 23 and attracted bids from euro area eligible counterparties of €7.68 billion, €0.18 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 0.00 per cent, in accordance with current ECB policy.

On October 24, 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 $0.08 billion, which was allotted in full at a fixed rate of 2.7 per cent.

Domestic Treasury bill market

In the domestic primary market for Treasury bills, the Treasury invited tenders for 28-day and 182-day bills for settlement value October 25, maturing on November 22 and April 25, 2019, respectively. Bids of €42 million were submitted for the 28-day bills, with the Treasury accepting €11 million, while bids of €45 million were submitted for the 182-day bills, with the Treasury accepting €20 million. Since €31 million worth of bills matured during the week, the outstanding balance of Treasury bills remained unchanged at €300 million.                                  

The yield from the 28-day bill auction was -0.354 per cent, up by 0.1 basis point from bids with a similar tenor issued on October 18, representing a bid price of €100.0275 per €100 nominal. The yield from the 182-day bill auction was -0.355 per cent, a decrease of 0.6 basis point from bids with a similar tenor issued on October 4, representing a bid price of €100.1798 per €100 nominal.

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

Today, the Treasury will invite tenders for 28-day bills and 182-day bills maturing on November 29 and May 2, 2019, respectively.  

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