MSE | Wednesday, 12 March 2008

Increase in outstanding amount of Treasury Bills

Money Market Report for the week ended 7 March 2008

Eurosystem Monetary Operations
On Monday, 3 March, 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 €240.5 billion from euro area eligible counterparties, with the ECB allotting €172.5 billion, or 71.72% 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 4.11%, one basis point higher than that of the previous week.

Domestic Treasury Bill Market
In the domestic primary market for Treasury bills, the Treasury invited tenders for 28-day bills maturing on 4 April 2008. Bids for €51 million worth of bills were submitted, and all were accepted by the Treasury. As €23.94 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €27.1 million to €355.6 million.
The yield resulting from the auction was 4.179%, 14.1 basis points lower than that on bills with a similar tenor issued on 5 October 2007. However, it should be pointed out that at the time the official Central Bank Intervention Rate was 25 basis points higher than the current rate. The latest yield represented a bid price of 99.676 per 100 nominal.
On Tuesday the Treasury invited tenders for 91-day bills maturing on 13 June 2008.
Treasury bill trading on the Malta Stock Exchange amounted to €735,741 during the week, while off-Exchange transactions amounted to €144,211. All trades were conducted by the Bank in its role as market maker.