On January 24, the ECB announced its weekly Main Refinancing Operation (MRO). The auction was conducted on January 25, and attracted bids from euro area eligible counterparties of €165.60 billion, €11.3 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.
Also on January 24, the ECB announced a three-month Longer-Term Refinancing Operation (LTRO) to be settled as a fixed rate tender procedure with full allotment, with the rate fixed at the average rate of the MROs over the life of the operation. The auction attracted bids of €71.14 billion from euro area eligible counterparties, which amount was allotted in full, in accordance with current ECB policy.
On January 25, 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, January 21, 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 €88.82 billion, with the ECB allotting the full intended volume of €76.50 billion, or 86.13 per cent of the total bid amount. The marginal rate on the auction was set at 0.99 per cent, with the weighted average allotment rate at 0.89 per cent.
On January 26, 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 1.17 per cent.
In the domestic primary market for Treasury Bills, the Treasury invited tenders for 91-day bills maturing on April 29, 2011, and for 182-day bills maturing on July 29, 2011. Bids of €67.25 million were submitted for the 91-day bills, with the Treasury accepting €3.25 million, while bids of €44.65 million were submitted for the 182-day bills, with the Treasury accepting €15.33 million. Since no bills matured during the week, the outstanding balance of Treasury Bills increased by €18.58 million, to stand at €436.24 million.
The yield from the 91-day bill auction was 1.00 per cent, i.e. seven basis points higher than on bills with a similar tenor issued on January 21, 2011, representing a bid price of 99.7479 per 100 nominal. The yield from the 182-day bill auction was 1.136 per cent, i.e. 9.5 basis points higher than on bills with a similar tenor issued on January 14, 2011, representing a bid price of 99.4290 per 100 nominal.
During the week, there was no Treasury Bill trading on the Malta Stock Exchange.
Today, the Treasury will invite tenders for 182-day bills maturing on August 5, 2011.