On Monday, June 21, the ECB announced its weekly MRO. The auction, conducted last Tuesday, June 22, attracted bids from euro area eligible counterparties of €151.51 billion, €24.84 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.
On Tuesday, June 22, the ECB also conducted an auction for a seven-day, fixed-term deposit intended to absorb €51 billion. The operation was designed to sterilise the effect of purchases made under the Securities Market Programme and settled by the previous Friday, June 18. The auction, carried out at a variable rate with euro area eligible counterparties that were allowed to place up to two bids at a maximum rate of one per cent, attracted bids amounting to €71.56 billion. The ECB allotted the full intended volume of €51 billion, or 71.27 per cent of the total amount bid for. The marginal rate on this operation was set at 0.4 per cent, with the weighted average rate resulting at 0.31 per cent.
On Wednesday, June 23, 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 1.19 per cent, but it did not attract any bids.
Meanwhile, in the domestic primary market for Treasury Bills, the Treasury invited tenders for 182-day bills maturing on December 24, 2010, and for 273-day bills maturing on March 25, 2011. Bids of €69.5 million were submitted for the 182-day bills, with the Treasury accepting just €2.5 million, while bids of €64 million were submitted for the 273-day bills, with the Treasury accepting €17.5 million. Since €41.62 million worth of bills matured during the week, the outstanding balance of Treasury Bills decreased by €21.62 million, to stand at €552.61 million.
The yield resulting from the 182-day bill auction was 0.75 per cent, i.e. 13.3 basis points less than on bills with a similar tenor issued on June 18, 2010. The yield on these bills represented a bid price of 99.6223 per 100 nominal. The yield resulting from the 273-day bill auction was 0.8830 per cent, i.e. 14.5 basis points higher than that on bills with a similar tenor issued on June 4, 2010. The yield on these bills represented a bid price of 99.3348 per 100 nominal.
Treasury Bill trading on the Malta Stock Exchange amounted to €2.78 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 which amounted to €0.47 million were transacted by the Central Bank of Malta.
Today, the Treasury will invite tenders for 91-day bills maturing on October 1, 2010, and 273-day bills maturing on April 1, 2011.