Issue link: https://maltatoday.uberflip.com/i/292371
maltatoday, WEDNESDAY, 9 APRIL 2014 13 Business Today Money Market Report for the week ending April 4, 2014 ECB decisions On Thursday, April 3, the Governing Council of the European Central Bank (ECB) decided to keep the interest rate on the main refinancing operations (MRO) unchanged at 0.25%. Interest rates on the marginal lending facility and on the deposit facility were also left unchanged at 0.75% and 0.00%, respectively. ECB Monetary Operations On Monday, March 31, the ECB announced its weekly MRO. The auction was conducted on Tuesday, April 1, and attracted bids from euro area eligible counterparties of €110.64 billion, €10.66 billion lower 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, April 1, 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 28. 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 €199.72 billion, with the ECB allotting €175.50 billion, or 87.87% of the total bid amount. The marginal rate on the auction was set at 0.23%, with the weighted average rate at 0.21%. On Wednesday, April 2, 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 0.58% and did not attract bids from euro area eligible counterparties. 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 July 4 and October 3, 2014, respectively. Bids of €16.42 million were submitted for the 91- day bills, with the Treasury accepting €5.00 million, while bids of €10.00 million were submitted for the 182- day bills, with the Treasury accepting all bids. Since €17.50 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €2.50 million, to stand at €364.70 million. The yield from the 91-day bill auction was 0.350%, i.e. 1.60 basis points lower than on bills with a similar tenor issued on March 28, 2014, representing a bid price of 99.9116 per 100 nominal. The yield from the 182-day bill auction was 0.667%, i.e. 2.70 basis points higher than on bills with a similar tenor issued on March 28, 2014, representing a bid price of 99.6639 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 11 and October 10, 2014, respectively.