Money market report for the week ended March 26

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ECB monetary operations

On March 22, the European Central Bank announced the seven-day main refinancing operations (MRO). The operation was conducted on March 23 and attracted bids from euro area eligible counterparties of €271 million, €338 million lower than 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 March 24, the ECB conducted the Pandemic Emergency Longer-term Refinancing Operation (PELTRO) maturing on March 31, 2022, which attracted bids from euro area eligible counterparties of €420.70 million. This operation was carried out through a fixed rate tender procedure with full allotment, with an interest rate that is equal to 25 basis points below the average MRO rate over the life of the PELTRO.

Also, March 24, the ECB conducted the seven-day and 84-day US dollar funding operations through collateralised lending in conjunction with the US Federal Reserve. The seven-day USD operation attracted bids of $190.20 million, which was allotted in full at a fixed rate of 0.32 per cent. The 84-day USD operation was also carried out at a fixed rate of 0.32 per cent 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 182-day bills and 364-day bills for settlement value March 25, maturing on September 23, 2021 and March 24, 2022, respectively. Bids of €100 million were submitted for the 182-day bills, with the Treasury accepting €25 million, while bids of €95 million were submitted for the 364-day bills, with the Treasury accepting €20 million. Since €49 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €4 million, standing at €752.75 million.

The yield from the 182-day bill auction was -0.466 per cent, an increase of 0.3 basis point from bids with a similar tenor issued on March 18, 2021, representing a bid price of €100.2361 per €100 nominal. The yield from the 364-day bill auction was -0.453 per cent, an increase of 1.3 basis point from bids with a similar tenor issued on February 18, 2021, representing a bid price of €100.4601 per €100 nominal.

During the week under review, there was no trading on the Malta Stock Exchange.

On Monday, the Treasury invited tenders for 91-day bills and 182-day bills maturing on July 1 and September 30, 2021, respectively.

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