ECB monetary operations
On December 19, the European Central Bank announced the seven-day main refinancing operation (MRO).
The operation was conducted on December 20 and attracted bids from euro area eligible counterparties of €1.28 billion, €0.18 billion less than the previous week. The amount was allotted in full at a fixed rate equivalent to the prevailing MRO rate of 2.50 per cent, in accordance with current ECB policy.
On December 21, the ECB conducted the 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 MRO rate over the life of the operation. The operation attracted bids of €1.29 billion from euro area eligible counterparties.
Also on December 21, the ECB conducted the 14-day US dollar funding operation through collateralised lending in conjunction with the US Federal Reserve. This operation attracted bids of $0.41 billion, which was allotted in full at a fixed rate of 4.59 per cent.
Domestic Treasury bill market
In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day and 364-day bills for settlement value December 22, maturing on March 23 and December 21, 2023, respectively.
Bids of €199.28 million were submitted for the 91-day bills, with the Treasury accepting €41.28 million, while bids of €23.55 million were submitted for the 364-day bills, with the Treasury accepting all bids. Since €65 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €0.17 million, standing at €856.90 million.
The yield from the 91-day bill auction was 2.157 per cent, increasing by 0.80 basis points from bids with a similar tenor issued on December 15, representing a bid price of €99.4577 per €100 nominal. The yield from the 364-day bill auction was 2.918 per cent, increasing by 246.80 basis points from bids with a similar tenor issued on June 9, representing a bid price of €97.1341 per €100 nominal.
During this week, there was no trading on the Malta Stock Exchange.
Today, December 27, the Treasury will invite tenders for 91-day and 181-day bills maturing on March 30 and June 28, 2023, respectively.
The report was prepared by the Monetary Operations and Collateral Management Office of the Central Bank of Malta.