On November 4, the Governing Council of the European Central Bank (ECB) decided to keep the interest rate on its main refinancing operations unchanged at one per cent. Interest rates on the marginal lending facility and the deposit facility were also left unchanged, at 1.75 per cent and 0.25 per cent, respectively.
On November 1, the ECB announced its weekly MRO. The auction was conducted on November 2, and attracted bids from euro area eligible counterparties of €178.35 billion, €5.09 billion less 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 November 2, the ECB also conducted an auction for a seven-day fixed-term deposit intended to absorb €63.50 billion. The operation was designed to sterilise the effect of purchases made under the Securities Market Programme and settled by October 29. The auction was 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. It attracted bids amounting to €90.88 billion, with the ECB allotting the full intended volume of €63.50 billion, or 69.87 per cent of the total bid amount. The marginal rate on the auction was set at 0.62 per cent, with the weighted average rate at 0.57 per cent.
On November 3, the ECB conducted an eight-day US dollar funding operation through collateralised lending in conjunction with the US Federal Reserve. This attracted bids for $0.06 billion, which was allotted in full at a fixed rate of 1.18 per cent.
Meanwhile, in the domestic primary market for Treasury Bills, the Treasury invited tenders for 28-day bills maturing on December 3 and for 182-day bills maturing on May 6, 2011.
Bids amounting to €29.5 million were submitted for the 28-day bills, with the Treasury accepting just €4.5 million, while bids for €57.8 million were submitted for the 182-day bills, with the Treasury accepting €39.8 million. Since €39.65 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €4.65 million, to stand at €463.27 million.
The yield from the 28-day bill auction was 0.817 per cent, i.e. 0.7 basis points higher than that on bills with a similar tenor issued on October 29, representing a bid price of 99.9365 per 100 nominal.
The yield from the 182-day bill auction was 1.194 per cent, i.e. 2.5 basis points higher than on bills with a similar tenor issued on October 8, representing a bid price of 99.4000 per 100 nominal.
No Treasury Bill trading took place last week on the Malta Stock Exchange.
Today the Treasury will invite tenders for 28-day bills maturing on December 10 and 273-day bills maturing on August 12, 2011.