Money Mar­ket Re­port for the week end­ing 27 April

The Malta Business Weekly - - FRONT PAGE -

ECB De­ci­sions

On 26 April, the Govern­ing Coun­cil of the Euro­pean Cen­tral Bank de­cided that the in­ter­est rate on the main re­fi­nanc­ing op­er­a­tions and the in­ter­est rates on the mar­ginal lend­ing fa­cil­ity and the deposit fa­cil­ity will re­main un­changed at 0.00%, 0.25% and -0.40%, re­spec­tively. The Govern­ing Coun­cil ex­pects the key ECB in­ter­est rates to re­main at their present lev­els for an ex­tended pe­riod of time and well past the hori­zon of the net as­set pur­chases.

Re­gard­ing non-stan­dard mon­e­tary pol­icy mea­sures, the Govern­ing Coun­cil con­firms that the net as­set pur­chases, at the cur­rent monthly pace of €30bn, are in­tended to run un­til the end of Septem­ber, or be­yond, if nec­es­sary, and in any case un­til the Govern­ing Coun­cil sees a sus­tained ad­just­ment in the path of in­fla­tion con­sis­tent with its in­fla­tion aim. The Eurosys­tem will rein­vest the prin­ci­pal pay­ments from ma­tur­ing se­cu­ri­ties pur­chased un­der the as­set pur­chase pro­gramme for an ex­tended pe­riod of time after the end of its net as­set pur­chases and in any case for as long as nec­es­sary. This will con­trib­ute both to favourable liq­uid­ity con­di­tions and to an ap­pro­pri­ate mon­e­tary pol­icy stance.

ECB Mon­e­tary Op­er­a­tions

On 23 April, the ECB an­nounced its weekly MRO. The op­er­a­tion was con­ducted on 24 April and at­tracted bids from euro area el­i­gi­ble coun­ter­par­ties of €2.80bn, €1.16bn 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 April, 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 €2.28bn from euro area el­i­gi­ble coun­ter­par­ties. The amount was al­lot­ted in full in ac­cor­dance with cur­rent ECB pol­icy.

Also on 25 April, 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 $0.12bn, which was al­lot­ted in full at a fixed rate of 2.19%.

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 26 April, ma­tur­ing on 26 July and 25 Oc­to­ber, re­spec­tively. Bids of €45m were sub­mit­ted for the 91day bills, with the Trea­sury ac­cept­ing €17m, while bids of €35m were sub­mit­ted for the 182day bills, with the Trea­sury ac­cept­ing €3m. Since €10m worth of bills ma­tured dur­ing the week, the out­stand­ing bal­ance of Trea­sury bills in­creased by €10m, to stand at €313m.

The yield from the 91-day bill auc­tion was -0.354%, down by 0.2 ba­sis point from bids with a sim­i­lar tenor is­sued on 19 April, rep­re­sent­ing a bid price of €100.0896 per €100 nom­i­nal. The yield from the 182-day bill auc­tion was -0.356%, down by 0.1 ba­sis point from bids with a sim­i­lar tenor also is­sued on 19 April, rep­re­sent­ing a bid price of €100.1803 per €100 nom­i­nal.

Dur­ing the week un­der re­view, there was no trad­ing on the Malta Stock Ex­change.

On Mon­day the Trea­sury in­vited ten­ders for 91- and 182-day bills ma­tur­ing on 2 Au­gust and 1 Novem­ber, re­spec­tively.

Newspapers in English

Newspapers from Malta

© PressReader. All rights reserved.