On September 27, the ECB an-nounced its weekly MRO. The auction was conducted on September 28, and attracted bids from euro area eligible counterparties of €166.36 billion, €12.59 billion more than the amount bid for 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 the same day, the ECB also conducted an auction for a seven-day, fixed-term deposit intended to absorb €61.5 billion. The operation was designed to sterilise the effect of purchases made under the Securities Market Programme and settled by the previous Friday. It was carried out at a variable rate with euro area eligible counterparties, which were allowed to place up to two bids at a maximum rate of one per cent.

The auction attracted bids of €71.21 billion and the ECB allotted the full intended volume of €61.5 billion, or 86.36 per cent of the total amount bid for. The marginal rate on the auction was set at 0.75 per cent, with the weighted average rate standing at 0.38 per cent.

The following day, the ECB conducted a standard Longer-Term Refinancing Operation (LTRO) with a maturity of 84 days. The operation attracted bids for €104.01 billion, which 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 the same day, the ECB conducted a seven-day US dollar funding operation through collateralised lending in con-junction with the US Federal Res-erve.

This attracted bids of $0.06 billion, which was allotted in full at a fixed rate of 1.19 per cent.

On September 30, in line with the press release dated September 2, the ECB carried out a liquidity providing a six-day fine tuning operation in the form of a fixed rate tender with full allotment.

The operation was designed to smooth out the liquidity effects of a six-month LTRO and a one-year LTRO which matured on September 30. The auction attracted bids for €29.44 billion, which amount was allotted in full at the prevailing main refinancing rate of one per cent.

Meanwhile, in the domestic primary market for Treasury Bills, the Treasury invited tenders for 28-day bills maturing on October 29. Bids for €35.8 million were submitted, with the Treasury accepting €22.8 million.

Since €14.5 million worth of bills matured during the week, the outstanding balance of Treasury Bills increased by €8.3 million, to stand at €468.62 million.

The yield from the 28-day bill auction was 0.703 per cent, i.e. 0.3 basis points higher than on bills with a similar tenor issued on September 24, 2010, representing a bid price of 99.9454 per 100 nominal.

Treasury Bill trading on the Malta Stock Exchange amounted to €1.05 million during the week, with €0.33 million bills traded by the Central Bank of Malta in its role as market maker and €0.72 million bills transacted by other brokers.

Today, the Treasury will invite tenders for 28-day bills maturing on November 5, and 182-day bills maturing on April 8, 2011.

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