Central Bank Monetary Operations
On Friday, 30 March, the Central Bank of Malta conducted a six-day term deposit auction (Friday, 6 April being a public holiday), absorbing Lm119.8 million from the banking system. This was Lm7.3 million more than the Lm112.5 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 absorption of funds was in response to an increase in liquidity in the banking system during the week under review. The factors contributing to this were Government direct credits (mainly related to pensions and dividend payments) of Lm12.7 million and net maturing Treasury bills worth Lm5 million. Partly offsetting these liquidity-boosting factors was the fact that credit institutions started the week with a shortfall in their statutory reserve deposit accounts with the bank, purchases of foreign currency against the lira worth Lm6.4 million, an increase in currency in circulation of Lm2.2 million and a negative net clearing of cheques of Lm2 million.
Interbank market
No interbank deals were reported during the week.
Treasury Bill market
In the primary market for Treasury bills, the Treasury invited tenders for 182-day bills maturing on 28 September 2007. Of the Lm26.5 million worth of bids submitted, Lm7.5 million were accepted by the Treasury. As Lm14.5 million worth of bills matured during the week, the outstanding balance of Treasury bills fell by Lm7 million to Lm171.7 million.
The latest six-month rate resulting from the week’s Treasury bill auction was 4.2381 per cent. This was 4.5 basis points higher than the rate on similar bills issued on 16 February 2007 and reflected a bid price of Lm97.9305 per Lm100 nominal.
On Tuesday, the Treasury invited tenders for 183-day bills maturing on 5 October 2007. In the following week the Treasury will invite tenders for 273-day bills maturing on 11 January 2008.
In the secondary market for Treasury bills, trading increased to Lm0.5 million from the insignificant amount traded in the previous week. All deals were transacted with the bank in its role of market-maker.
Malta Real-time Interbank Payment System (MaRIS)
During the month of March, a total of 4,451 payment messages were processed through MaRIS, with a total value of Lm1,989.5 million. Of these, 2,090 were payments on behalf of customers, with a value of Lm152.3 million, and 2,361 were interbank payments totalling Lm1,837.2 million. The daily average volume for the month under review was 212 messages for a value of Lm94.7 million. The highest number of messages, 304, was processed on 20 March, while the highest value was registered on 2 March with Lm315.6 million.
Further details can be found on the Central Bank of Malta website: www.centralbankmalta.com