Money Market Report for the week ending 31 August

ECB Monetary Operations

On 27 August, the European Central Bank announced its weekly main refinancing operation. The operation was conducted on 28 August and attracted bids from euro area eligible counterparties of €2.54bn, €0.25bn lower than the bid amount of the previous week. The amount was allotted in full at a fixed rate equivalent to the prevail- ing MRO rate of 0.00%, in accordance with current ECB policy.

On 29 August, 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 €1.45bn from euro area eligible counterparties. The amount was allotted in full in accordance with current ECB policy.

Also on 29 August, 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 $0.09bn, which was allotted in full at a fixed rate of 2.42%.

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 30 August, maturing on 27 September and 29 November, respectively. Bids of €25.5m 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 €28.1m worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €5.1m, to stand at €351.5m.

The yield from the 28-day bill auction was -0.356%, unchanged from bids with a similar tenor issued on 16 August, representing a bid price of €100.0277 per €100 nominal. The yield from the 91-day bill auction was also - 0.356%, up by 0.2 basis point from bids with a similar tenor issued on 23 August, representing a bid price of €100.0901 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 91- and 182-day bills maturing on 6 December and 7 March 2019, respectively.