Increase in outstanding amount of Treasury Bills

On Monday, February 14, the European Central Bank (ECB) announced its weekly Main Refinancing Operation (MRO). The auction was conducted on Tuesday, February 15, and attracted bids from euro area eligible counterparties of €137.01 billion, €19.70 billion lower than the amount bid for in the previous week. The bid amount was allotted in full at a fixed rate equivalent to the prevailing main refinancing rate of one per cent, in accordance with current ECB policy.

On Tuesday, February 15, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €76.50 billion. The operation was designed to sterilise the effect of purchases made under the Securities Markets Programme and settled by the previous Friday, February 11. The auction was carried out at a variable rate, with euro area eligible counterparties allowed to place up to two bids at a maximum rate of one per cent. It attracted bids amounting to €102.78 billion, with the ECB allotting €76.50 billion or 74.43 per cent of the total amount bid for. The marginal rate on the auction was set at 0.80 per cent, with the weighted average rate at 0.71 per cent.

On Wednesday, February 16, the ECB conducted a seven-day US dollar funding operation through collateralised lending in conjunction with the US Federal Reserve. This attracted bids of $0.07 billion, which was allotted in full at a fixed rate of 1.16 per cent.

In the domestic primary market for Treasury Bills, the Treasury invited tenders for 91-day bills maturing on May 20, 2011. Bids of €67 million were submitted for the 91-day bills, with the Treasury accepting €24 million. Since €4 million worth of bills matured during the week, the outstanding balance of Treasury Bills increased by €20 million, to stand at €431.99 million.

The yield from the 91-day bill auction was 1.021 per cent, i.e. 1.8 basis points higher than on bills with a similar tenor issued on February 11, 2011, representing a bid price of 99.7426 per 100 nominal.

During the week, Treasury Bill trading on the Malta Stock Exchange amounted to €0.172 million, of which €0.047 million was conducted by the Central Bank of Malta in its role as market maker. The remaining €0.125 million was conducted by other brokers.

Today the Treasury will invite tenders for 91-day bills maturing on May 27, 2011 and for 182-day bills maturing on August 26, 2011.