On Monday, January 17, the ECB announced its weekly Main Refinancing Operation (MRO). The auction was conducted on Tuesday, January 18, and attracted bids from euro area eligible counterparties of €176.90 billion, €3.18 billion lower 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, January 18, the ECB conducted a Special Term Refinancing Operation (STRO) with a maturity of 21 days. This attracted bids of €70.35 billion, which were allotted in full at a fixed rate equivalent to the prevailing main refinancing rate of one per cent, also in accordance with current ECB policy.
Also on Tuesday, January 18, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €76.50 billion. The operation was designed to sterilise the effect of purchases made under the Securities Markets Programme and settled by the previous Friday, January 14, 2011. 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 €103.69 billion, with the ECB allotting the full intended volume of €76.50 billion, or 73.78 per cent of the total bid amount. The marginal rate on the auction was set at 0.8 per cent, with the weighted average allotment rate at 0.69 per cent.
On the same day, the last day of the reserve deposit maintenance period, the ECB conducted an overnight Fine-tuning Liquidity Absorbing Operation carried out at a variable rate, with counterparties allowed to place up to two bids at a maximum rate of one per cent. The operation attracted bids of €135.05 billion, with the ECB accepting the total amount bid for. The marginal rate on the operation was set at 0.80 per cent, while the weighted average allotment rate was 0.79 per cent.
On Wednesday, January 19, the ECB conducted a seven-day US dollar funding operation through collateralised lending in conjunction with the US Federal Reserve. This attracted bids of $0.07 billion, which was allotted in full at a fixed rate of 1.18 per cent.
In the domestic primary market for Treasury Bills, the Treasury invited tenders for 90-day bills maturing on April 21, 2011. Bids of €71.1 million were submitted, with the Treasury accepting €29.60 million. Since €15.76 million worth of bills matured during the week, the outstanding balance of Treasury Bills increased by €13.84 million, to stand at €417.66 million.
The yield from the 90-day bill auction was 0.93 per cent, i.e. 9.3 basis points higher than on bills with a similar tenor issued on January 7, 2011, representing a bid price of 99.7680 per 100 nominal.
During the week, Treasury Bill trading, which was all conducted by private brokers on the Malta Stock Exchange, amounted to €1.2 million.
Today the Treasury will invite tenders for 91-day bills maturing on April 29, 2011 and for 182-day bills maturing on July 29, 2011.