Issue link: https://maltatoday.uberflip.com/i/288366
maltatoday, WEDNESDAY, 2 APRIL 2014 13 Business Today Money Market Report for the week ending March 28, 2014 ECB Monetary Operations On Monday, March 24, the European Central Bank (ECB) announced its weekly main refinancing operation (MRO). The auction was conducted on Tuesday, March 25, and attracted bids from euro area eligible counterparties of €121.31 billion, €24.40 billion 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 0.25%, in accordance with current ECB policy. Also on Tuesday, March 25, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €175.50 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, March 21. 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 0.25%. It attracted bids amounting to €180.90 billion, with the ECB allotting €175.50 billion, or 97.01% of the total bid amount. The marginal rate on the auction was set at 0.25%, with the weighted average rate at 0.22%. On Wednesday, March 26, 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 auction attracted bids of €11.62 billion from euro area eligible counterparties, which amount was allotted in full in accordance with current ECB policy. Also on Wednesday, March 26, the ECB conducted a seven-day US dollar funding operation through collateralised lending in conjunction with the US Federal Reserve. This operation was carried out at a fixed rate of 0.59% and did not attract bids from euro area eligible counterparties. Furthermore on Wednesday, March 26, the ECB, in conjunction with the US Federal Reserve, conducted an 84-day US dollar funding operation through collateralised lending. This attracted bids of $0.05 billion, which was allotted in full at a fixed rate of 0.59%. Domestic Treasury Bill Market In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day and 182-day bills maturing on June 27 and September 26, 2014, respectively. Bids of €28.62 million were submitted for the 91-day bills, with the Treasury accepting €1.20 million, while bids of €31.50 million were submitted for the 182-day bills, with the Treasury accepting €23.50 million. Since €34.00 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €9.30 million, to stand at €367.20 million. The yield from the 91-day bill auction was 0.366%, i.e. 0.10 basis point higher than on bills with a similar tenor issued on March 21, 2014, representing a bid price of 99.9076 per 100 nominal. The yield from the 182-day bill auction was 0.640%, i.e. 3.50 basis points lower than on bills with a similar tenor issued on March 21, 2014, representing a bid price of 99.6775 per 100 nominal. During the week under review, there was no trading on the Malta Stock Exchange. On Tuesday the Treasury invited tenders for 91-day and 182-day bills maturing on July 4 and October 3, 2014, respectively.