On Monday, June 14, the ECB announced its weekly MRO. The auction, conducted last Tuesday, attracted bids from euro area eligible counterparties of €126.67 billion, which were €4.63 billion more 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.
The same day, the ECB conducted a Special Term Refinancing Operation (STRO) with a maturity of 28 days. This attracted bids of €31.60 billion, with bids again being allotted in full at a fixed rate equivalent to the prevailing main refinancing rate of one per cent, in accordance with current ECB policy.
Also, last Tuesday, the ECB conducted an auction for a seven-day, fixed-term deposit intended to absorb €47 billion. The operation was designed to sterilise the effect of purchases made under the Securities Market Programme that was settled by the previous Friday (June 11). The auction, 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, attracted bids amounting to €71.08 billion. The ECB allotted the full intended volume of €47 billion, or 66.12 per cent of the total amount bid for. The marginal rate on this operation was set at 0.3 per cent, with the weighted average rate set at 0.28 per cent.
On the same day, it being the end of the reserve deposit maintenance period, the ECB also conducted an overnight Fine-tuning Liquidity Absorbing Operation. This was carried out at a variable rate, with counterparties allowed to place up to two bids at a maximum of one per cent. The operation attracted bids for €363.77 billion, of which the ECB accepted €363.47 billion, or 99.92 per cent of the total amount bid for. The marginal rate on this operation was set at 0.80 per cent, while the weighted average rate was 0.77 per cent.
Last Wednesday, in conjunction with the US Federal Reserve, the ECB conducted a seven-day US dollar funding operation through collateralised lending. The rate for the operation was fixed at 1.17 per cent, but it did not attract any bids.
Meanwhile, in the domestic primary market for Treasury Bills, the Treasury invited tenders for 91-day bills maturing on September 17, and for 182-day bills maturing on December 17. Bids amounting to €61.95 million were submitted for the 91-day bills, with the Treasury accepting €18.95 million, while bids amounting to €63.83 million were submitted for the 182-day bills, with the Treasury accepting €33.83 million. Since €48.09 million worth of bills matured during the week, the outstanding balance of Treasury Bills increased by €4.69 million, to stand at €574.23 million.
The yield resulting from the 91-day bill auction was 0.675 per cent, i.e. 8.6 basis points higher than on bills with a similar tenor issued on June 11. The yield on these bills represented a bid price of 99.8297 per 100 nominal. The yield resulting from the 182-day bill auction was 0.8830 per cent, i.e. 21.6 basis points higher than that on bills with a similar tenor issued on May 28. The yield on these bills represented a bid price of 99.5556 per 100 nominal.
Treasury Bill trading on the Malta Stock Exchange amounted to €3.33 million during the week, with all trading being conducted by the Central Bank of Malta in its role as market maker. Concurrently, all off-exchange transactions amounting to €0.13 million were transacted by the Central Bank of Malta.
Today, the Treasury will invite tenders for 182-day bills maturing on December 24, 2010, and 273-day bills maturing on March 25, 2011.