Money Market Report for the week ending 8 March

ECB decisions

On Thursday, 7 March, the governing council of the European Central Bank (ECB) kept the interest rate on the main refinancing operations (MRO) unchanged at 0.75%. Interest rates on the marginal lending facility and on the deposit facility were also left unchanged at 1.50% and 0.00%, respectively.

ECB Monetary Operations

On Monday, 4 March, the ECB announced its weekly MRO. The auction was conducted on Tuesday, 5 March, and attracted bids from euro area eligible counterparties of €129.80 billion, €1.31 billion lower than the amount bid for in the previous week. The bid amount was allotted in full at a fixed rate equivalent to the prevailing main refinancing rate of 0.75%, in accordance with current ECB policy.

Also on Tuesday, 5 March, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €205.5 billion. This operation was designed to sterilise the effect of purchases made under the Securities Markets Programme that were settled but had not yet matured by the previous Friday, 1 March. The auction was carried out at a variable rate, with euro area eligible counterparties allowed to place up to four bids at a maximum rate of 0.75%. It attracted bids amounting to €301.6 billion, with the ECB allotting €205.5 billion or 68.14% of the total bid amount. The marginal rate on the auction was set at 0.04%, with the weighted average rate at 0.03%.

On Wednesday, 6 March, 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 $0.025 billion, which was allotted in full at a fixed rate of 0.66%.