Money Market Report for the week ending 27 January
ECB Monetary Operations
On 23 January, the European Central Bank (ECB) announced its weekly main refinancing operation (MRO). The operation was conducted on 24 January, and attracted bids from euro area eligible counterparties of €33.99bn, €1.66bn 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 0.00%, in accordance with current ECB policy.
On 25 January, the ECB conducted a three-month, longerterm 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 €3.35bn from euro area eligible counterparties. The amount was allotted in full in accordance with current ECB policy.
Also on 25 January, 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 $0.27bn, which was allotted in full at a fixed rate of 1.15%.
Domestic Market Treasury Bill
In the domestic primary market for Treasury bills, the Treasury invited tenders for 28- and 182day bills for settlement value 26 January, maturing on 23 February and 27 July, respectively. Bids of €55m were submitted for the 28day bills, with the Treasury accepting €2m, while bids of €60m were submitted for the 182-day bills, with the Treasury accepting €8m. Since no bills matured during the week, the outstanding balance of Treasury bills increased by €10m, to stand at €278.20m.
The yield from the 28-day bill auction was -0.396%, down by 0.2 basis point from bids with a similar tenor issued on 15 December 2016, representing a bid price of €100.0308 per €100 nominal. The yield from the 182-day bill auction was -0.392%, down by 0.1 basis point from bids with a similar tenor issued on 19 January, representing a bid price of €100.1986 per €100 nominal.
During the week under review, there was no trading on the Malta Stock Exchange. This week the Treasury will invite tenders for 91and 182-day bills maturing on 4 May and 3 August, respectively.