MSE | Wednesday, 13 February 2008

Decrease in outstanding amount of Treasury bills

Money Market Report for the week ended 8 February 2008

Eurosystem Monetary Operations
On Monday, 4 February, the European Central Bank (ECB) announced the weekly Main Refinancing Operation (MRO) through which the Eurosystem injects liquidity with a standard maturity of seven days into the euro area money market. This operation attracted bids for €223.8 billion from euro area eligible counterparties, with the ECB allotting €161.5 billion, or 72.16% of the total amount bid for. The marginal rate, which is the rate at which the total tender allotment is exhausted, was set by the ECB at 4.17%, that is 1 basis point lower than the marginal rate of the previous week.

Domestic Treasury Bill Market
In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day bills maturing on 9 May 2008. Bids for €15.74 million worth of bills were submitted, and out of these the Treasury accepted bids for €4.86 million. As €8.42 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €3.6 million to €313.2 million.
The latest 91-day yield resulting from the auction was 4.178%, almost unchanged from the 4.187% yield on similar bills issued on 18 January 2008. This represented a bid price of 98.9549 per 100 nominal.
On Tuesday the Treasury invited tenders for 91-day bills maturing on 16 May 2008.
Treasury bill trading on the Malta Stock Exchange amounted to €0.77 million during the week, with all transactions being conducted by the Bank in its role as market maker in the secondary market. No transactions were conducted off-Exchange.