10 18 January 2001
Money Market Report for week ending 5 January
liquidity shortage persists
Central Bank Monetary Operations
During the first week of the year, the banking system continued to be characterised by a shortage of short-term liquidity. The main reason behind this shortage was the amount of Lm53.2 million maturing repos, previously injected in the money market on 22 December 2000.
Accordingly, on Friday, 5 January, the Central Bank of Malta conducted a 14-day Repo (injection) auction, at a fixed rate of 4.80%. The amount injected, at Lm40.6 million, was higher than the previous week's amount of Lm11.5 million but Lm12.6 million less than the amount of outstanding repos that came up for repayment during the week.
Inter-bank market activity, at Lm2 million was on the same level of the previous week. Trading was restricted to 7-day dealing at a weighted average rate of 4.78%, same as the week before.
Malta Government Treasury Bills
During the week under review, Government issued an amount of Lm6.3 million in 182-day Treasury Bills. This amount was practically half the Lm11.7 million maturing on the same day. As a result, the volume of outstanding Treasury Bills closed the week at Lm167.6 million, compared to the previous week's level of Lm173 million.
At 4.9497%, the weighted average rate of the 182-day bills edged upwards on the previous level of 4.9457%. This latest yield corresponds to a weighted average bid price of Lm97.5914 per Lm100 nominal.
Last Tuesday, the Treasury received applications for the tender of 182-day bills to mature on 13 July 2001. These bills will be issued on Friday 12 January, coinciding with a same day maturing amount of Lm5 million.
For the following week, on Tuesday16 January, the Treasury will receive applications for 364-day bills to be issued on Friday 19 January to mature on 18 January 2002.
In the secondary market for Treasury bills, turnover amounted to Lm0.07 million. All trading was conducted by the Central Bank in its role as market maker.