Money Market Report for the week ending 28 July

ECB Monetary Operations

On 24 July the European Central Bank (ECB) announced its weekly main refinancing operation (MRO). The operation was conducted on 25 July and attracted bids from euro area eligible counterparties of €7.35bn, €0.52bn 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 26 July, 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 €2.86bn from euro area eligible counterparties. The amount was allotted in full in accordance with current ECB policy.

Also on 26 July, 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 $0.04bn, which was allotted in full at a fixed rate of 1.65%.

Domestic Treasury Bill Market

In the domestic primary market for Treasury bills, the Treasury invited tenders for 28- and 91-day bills for settlement value 27 July, maturing on 24 August and 26 October, respectively. Bids of €27m were submitted for the 28day bills, with the Treasury accepting €2m, while bids of €40m were submitted for the 91-day bills, with the Treasury accepting €5m. Since €18m worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €11m, to stand at €161.4m.

The yield from the 28-day bill auction was -0.372%, down by 2.2 basis points from bids with a similar tenor issued on 11 May, representing a bid price of €100.0289 per €100 nominal. The yield from the 91-day bill auction was - 0.342%, down by 0.1 basis point from bids with a similar tenor issued on 20 July, representing a bid price of €100.0865 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- and 182-day bills maturing on 2 November and 1 February 2018, respectively.