Money Market Report for the week ended 2 January 2009
Increase in outstanding amount of Treasury Bills
ECB Monetary Operations
On Monday, 29 December, the ECB conducted its weekly Main Refinancing Operation (MRO). This attracted bids for €238.9 billion from euro area eligible counterparties, at a fixed rate equivalent to the main refinancing rate of 2.50%.
On the same day, the Eurosystem and the Swiss National Bank (SNB) conducted a EUR/CHF foreign exchange swap, with an 8-day maturity, to provide Swiss Franc liquidity against euro. This operation attracted bids for €15.81 billion, at a fixed price of -6.97 swap points.
On Tuesday, 30 December, the ECB, in conjunction with the US Federal Reserve, conducted an 83-day US dollar funding operation through collateralised lending. This attracted bids for $10.79 billion, at a fixed rate of 1.2%. In parallel with this operation, the Eurosystem also offered 83-day dollar liquidity through a EUR/USD foreign exchange swap operation. This attracted bids for $80 billion at a fixed price of -8.3 swap points.
The amounts bid for in all the above-mentioned operations were allotted in full in accordance with the ECB’s press releases dated 15 October and 18 December 2008.
Domestic Treasury Bill Market
In the domestic primary market for Treasury bills, the Treasury invited tenders for 179-day bills to be issued on 5 January and maturing on 3 July 2009. Bids for €23.82 million were submitted, with the Treasury accepting €13.51 million. Since no bills matured during the week, the outstanding balance of Treasury bills increased by €13.51 million to €379.31 million.
The yield resulting from the auction was 2.653%, 1.6 basis points higher than that on bills with a similar tenor issued on 29 December 2008. The latest yield represented a bid price of 98.6980 per 100 nominal.
On Tuesday the Treasury invited tenders for 90-day bills maturing on 9 April 2009.
Treasury bill trading on the Malta Stock Exchange amounted to €12.24 million during the week, with all trades being conducted by the Central Bank of Malta in its role as market maker. Off-Exchange transactions amounted to €549,000.