On September 13, 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 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 current monthly pace of €30 billion until the end of this month. After September 2018, the Governing Council will reduce the monthly pace of the net asset purchases to €15 billion until the end of December and 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 September 10, the ECB announced its weekly main refinancing operation (MRO).  The operation was conducted on September 11 and attracted bids from euro area eligible counterparties of €4.22 billion, €0.61 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 September 12, 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 $0.10 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 90-day and 273-day bills for settlement value September 13, maturing on December 12 and June 13, 2019, respectively. Bids of €46 million were submitted for the 90-day bills, with the Treasury accepting €13 million, while bids of €19 million were submitted for the 273-day bills, with the Treasury accepting €2 million. Since €30 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €15 million, to stand at €334.50 million.

The yield from the 90-day bill auction was -0.358 per cent, down by 0.2 basis point from bids with a similar tenor issued on September 6, representing a bid price of €100.0896 per €100 nominal. The yield from the 273-day bill auction was -0.323%, a decrease by 6.8 basis points from bids with a similar tenor issued on July 5, representing a bid price of €100.2455 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 bills maturing on December 20.

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