ECB decisions
On January 24, the Governing Council of the European Central Bank (ECB) decided that the interest rate on the main refinancing operations (MRO) and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at zero per cent, 0.25 per cent and -0.40 per cent respectively. The Governing Council expects the key ECB interest rates to remain at their present levels at least through the summer of 2019, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to, two per cent over the medium term.
Regarding non-standard monetary policy measures, the Governing Council intends to continue reinvesting, in full, the principal payments from maturing securities purchased under the asset purchase programme for an extended period of time past the date when it starts raising the key ECB interest rates, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation.
ECB monetary operations
On January 21, the ECB announced its weekly MRO. The operation was conducted on January 22, and attracted bids from euro area eligible counterparties of €6.58 billion, €0.27 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 zero per cent, in accordance with current ECB policy. On January 23, 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 $0.07 billion, which was allotted in full at a fixed rate of 2.91 per cent.
Domestic Treasury bill market
In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day bills and 182-day bills for settlement value January 24, maturing on April 25, and July 25, respectively. Bids of €40 million were submitted for the 91-day bills, with the Treasury accepting €15 million. Bids of €40 million were also submitted for the 182-day bills, with the Treasury accepting €10 million. Since no bills matured during the week, the outstanding balance of Treasury bills increased by €25 million, to stand at €354 million.
The yield from the 91-day bill auction was -0.343 per cent, unchanged from bids with a similar tenor issued on January 17, representing a bid price of €100.0868 per €100 nominal. The yield from the 182-day bill auction was -0.291 per cent, a decrease of 0.2 basis point from bids with a similar tenor issued on January 3, representing a bid price of €100.1473 per €100 nominal.
During the week under review, there was no trading on the Malta Stock Exchange.
Today, the Treasury will invite tenders for 91-day and 182-day bills maturing on May 2, and August 1, respectively.