Further decrease in outstanding amount of Treasury Bills

On Monday, November 9, the ECB announced its weekly Main Refinancing Operation(MRO). This auction, which was conducted on Tuesday, attracted bids for €51.25 billion from euro area eligible counterparties, €5.05 billion more than the amount bid for in the previous week.

Also on Monday, November 9, 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 €4.73 billion, and since this was well below the intended amount of €25 billion, all bids were allotted in full at a fixed price of -0.86 swap points.

On Tuesday, November 10, the ECB conducted a Special Term Refinancing Operation (STRO) with a maturity of 27 days. This attracted bids for €2.54 billion.

On the same day, the ECB, in conjunction with the US Federal Reserve, conducted a seven-day US dollar funding operation through collateralised lending. This attracted bids for $21.97 billion, which amount was allotted in full at a fixed rate of 1.13 per cent.

Also on Tuesday, November 10, it being the end of the reserve deposit maintenance period, the ECB conducted an overnight Fine Tuning Operation to absorb excess liquidity from the market. This was carried out at a variable rate, with counterparties able to place bids at a maximum of one per cent. The operation attracted bids for €191.88 billion, of which the ECB accepted €191.38 billion, or 99.74 per cent of the total amount bid for. The marginal rate on this operation was set at 0.80 per cent, while the average weighted rate was 0.76 per cent.

On Wednesday, November 11, the ECB conducted two supplementary Longer-Term Refinancing Operations (LTROs), one with a maturity of 91 days and the other with a maturity of 182 days. These operations received bids for €10.79 billion and €0.78 billion, respectively.

The amounts bid for in all the ECB's euro refinancing operations were allotted in full at a fixed rate equivalent to the prevailing refinancing rate of one per cent, in accordance with the ECB's current policy.

In the domestic primary market for Treasury Bills, the Treasury invited tenders for 91-day bills maturing on February 12, 2010. Bids for €36.96 million were submitted, with the Treasury allotting €17.62 million. Since €32.45 million worth of bills matured during the week, the outstanding balance of Treasury Bills decreased by €14.83 million to €563.85 million.

The yield resulting from the auction was 1.434 per cent, i.e. 0.8 basis points less than that on bills with a similar tenor issued on October 30, 2009. The latest yield represented a bid price of 99.6388 per 100 nominal.

Today the Treasury will invite tenders for 91-day bills maturing on February 19, 2010.

Treasury Bill trading on the Malta Stock Exchange amounted to €10.89 million during the week, with all trades being conducted by the Central Bank of Malta in its role as market facilitator. Off-exchange transactions amounted to €0.07 million.