Money Market Report for the week ending 5 January

ECB Monetary Operations

On 29 December the European Central Bank (ECB) announced the seven-day main refinancing operations (MRO). The operation was conducted on 2 January and attracted bids from euro area eligible counterparties of €7,374.50m, €6,710.00m less than the previous week. The amount was allotted in full at a fixed rate equivalent to the prevailing MRO rate of 4.50%, in accordance with current ECB policy.

On 3 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 $222.50m, which were allotted in full at

a fixed rate of 5.58%.

Domestic Treasury Bill Market

In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day and 182-day bills for settlement value 4 January, maturing on 4 April and 4 July, respectively. Bids of €53.06m were submitted for the 91-day bills, with the Treasury accepting €13.06m, while bids of €5.73m were submitted for the 182-day bills, with the Treasury accepting all amounts. Since €33.19m worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €14.40m, to stand at €657.23m.

The yield from the 91-day bill auction was 3.597%, increasing by 1.50 basis points from bids with a similar tenor issued on 29 December, representing a bid price of €99.0990 per €100 nominal. The yield from the 182-day bill auction was 3.449%, increasing by 0.60 basis point from bids with a similar tenor also issued on 29 December, representing a bid price of €98.2862 per €100 nominal.

During this week, secondary market turnover in Malta Government Treasury bills amounted to €100,000, all executed on the on-exchange market of the Malta Stock Exchange.

On Tuesday the Treasury invited tenders for 91-day and 182-day bills maturing on 11 April and 11 July, respectively.