ECB decisions
On March 19, the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve and the Swiss National Bank announced a coordinated action to enhance the provision of liquidity via the standing US dollar liquidity swap line arrangements.
To improve the swap lines’ effectiveness in providing US dollar funding, the central banks currently offering US dollar operations agreed to increase the frequency of seven-day maturity operations from weekly to daily. These daily operations started on March 20, and will continue at least through the end of April.
The network of swap lines among these central banks is a set of available standing facilities and serves as an important liquidity backstop to ease strains in global funding markets, thereby helping to mitigate the effects of such strains on the supply of credit to households and businesses.
ECB monetary operations
On March 20, the ECB announced the seven-day main refinancing operation (MRO). The operation was conducted on March 21, and attracted bids from euro area eligible counterparties of €974 million, €3 million less than the previous week. The amount was allotted in full at a fixed rate equivalent to the prevailing MRO rate of 3.50%, in accordance with current ECB policy.
On a daily basis, the ECB conducted the seven-day US dollar funding operations through collateralised lending in conjunction with the US Federal Reserve. The five operations attracted bids of a total of $483.50 million, with the rate ranging between 4.94 per cent and 5.06 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 March 23, maturing on June 22, 2023, and March 21, 2024, respectively.
Bids of €237.64 million were submitted for the 91-day bills, with the Treasury accepting €24.89 million, while bids of €29.33 million were submitted for the 364-day bills, with the Treasury accepting €12.33 million.
Since €60.28 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €23.06 million, standing at €794.67 million. The yield from the 91-day bill auction was 2.867 per cent, increasing by 2.00 basis points from bids with a similar tenor issued on March 16, representing a bid price of €99.2805 per €100 nominal. The yield from the 364-day bill auction was 3.130 per cent, increasing by 11.5 basis points from bids with a similar tenor issued on February 16, representing a bid price of €96.9323 per €100 nominal.
During this week, there was no trading on the Malta Stock Exchange.
Today, March 28, the Treasury will invite tenders for 90-day and 182-day bills maturing on June 28 and September 28, respectively.
This report was prepared by the Monetary Operations and Collateral Management Office of the Central Bank of Malta.