Decrease in outstanding amount of Treasury Bills

On Monday, August 17, the ECB announced its weekly Main Refinancing Operation (MRO). This auction, which was conducted last Tuesday, attracted bids for €76.06 billion from euro area eligible counterparties, which amount was allotted in full at a fixed rate equivalent to the prevailing main refinancing rate of one per cent in accordance with the current ECB policy. Also on Monday, August 17, the Eurosystem and the Swiss National Bank conducted a EUR/CHF foreign exchange swap, with a seven-day maturity, to provide Swiss franc liquidity against euro.

This operation attracted bids for €12.74 billion, which was slightly higher than half the intended amount of €25 billion, and all bids were allotted in full at a fixed price of -0.85 swap points. On Wednesday, August 19, the ECB, in conjunction with the US Federal Reserve, conducted a US dollar funding operation with a tenor of seven days. This attracted bids for $38.36 billion, which amount was allotted in full at a fixed rate of 1.17 per cent.

In the domestic primary market for Treasury Bills, the Treasury invited tenders for 91-day bills maturing on November 20. Bids for €54.88 million were submitted, with the Treasury allotting €17.48 million. Since €36.55 million worth of bills matured during the week, the outstanding balance of Treasury Bills decreased by €19.07 million to €594.00 million.

The yield resulting from the auction was 1.473 per cent, i.e. 2.8 basis points lower than that on bills with a similar tenor issued on August 14.

The latest yield represented a bid price of 99.6290 per 100 nominal.

Today the Treasury will invite tenders for 273-day bills maturing on May 28, 2010.

Treasury bill trading on the Malta Stock Exchange amounted to €3.61 million during the week, with €3.41 million trades being conducted by the Central Bank of Malta in its role as market maker and € 0.2 million trades being conducted by other brokers. Off-exchange transactions amounted to € 0.08 million.