On Friday, 4 May, the Central Bank of Malta conducted a seven-day term deposit auction absorbing Lm73.2 million from the banking system. This was Lm0.3 million less than the Lm73.5 million that matured on the same day. The interest rate that resulted from the auction was 3.95 per cent, which is the floor of the interest rate band at which the bank is currently conducting its term deposit auctions.

The net injection of funds was in response to a marginal reduction in liquidity in the banking system during the week under review. The main contributing factors were the Malta Government stock issue, which absorbed Lm27.4 million, a negative net cheque clearing of Lm8.2 million,

purchases of foreign currency against the Maltese lira worth Lm5.8 million and the fact that the credit institutions had started the week with a shortfall in their statutory reserve deposit accounts with the bank.

Partly offsetting these factors were the transfer of government funds totalling Lm26.6 million from the bank to the credit institutions, maturing Treasury bills worth Lm8.7 million, direct credits, mainly related to pensions, of Lm3.5 million and a Lm1 million contraction in currency in circulation.

Interbank market: No interbank deals were reported during the week under review.

Treasury Bill market

In the primary market for Treasury bills, the Treasury invited tenders for 91-day bills maturing on 3 August 2007. Out of the Lm26.4 million worth of bids submitted, none were accepted. Treasury bills amounting to Lm8.6 million matured during the week, leaving the outstanding balance of bills at Lm185.2 million.

On Tuesday, the Treasury invited tenders for 364-day bills maturing on 9 May 2008.

Treasury bill trading on the Malta Stock Exchange amounted to just Lm0.58 million during the week, while off-exchange transactions amounted to Lm2.28 million. Of the resulting total secondary market turnover of Lm2.86 million, the bank effected purchases amounting to Lm1.38 million and sales of Lm0.23 million.

Malta Real-Time Interbank Payment System (MaRIS) – April 2007

During the month of April, 4,419 payment messages were processed through MaRIS, for a total value of Lm1,455.7 million. Of these, 1,955 were payments on behalf of customers, for a value of Lm112.2 million, and 2,464 were interbank payments totalling Lm1,343.5 million. The daily average volume for the month under review was 221 messages for a value of Lm72.8 million. The highest number of messages, totalling 350, was processed on 30 April, whilst the highest value was registered on 5 April, with Lm268.9 million.

Further details can be found on the Central Bank of Malta website: ww.centralbankmalta.com