Decrease in outstanding amount of Treasury Bills

On Monday, February 7, the ECB announced its weekly Main Refinancing Operation (MRO). The auction was conducted on Tuesday, February 8, and attracted bids from euro area eligible counterparties of €156.71 billion, €57.02 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.

The same day, the ECB conducted a Special Term Refinancing Operation (STRO) with a maturity of 28 days. This attracted bids of €61.47 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, the same day, ECB also 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, February 4. 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 1.00 per cent. It attracted bids amounting to €93.34 billion, with the ECB allotting the total amount bid for. The marginal rate on the auction was set at 0.95 per cent, with the weighted average rate at 0.87 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 of one per cent. The operation attracted bids of €159.71 billion, with the ECB accepting the €158.66 billion or 99.34 per cent of the amount bid for. The marginal rate on the operation was set at 0.80 per cent, while the weighted average allotment rate was 0.78 per cent.

On Wednesday, February 9, 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 May 13, 2011, and for 182-day bills maturing on August 12, 2011.

Bids of €62.35 million were submitted for the 91-day bills, with the Treasury accepting only €5 million, while bids of €64.25 million were submitted for the 182-day bills, with the Treasury accepting €22.25 million.

Since €50 million worth of bills matured during the week, the outstanding balance of Treasury Bills decreased by €22.75 million, to stand at €413.39 million. The yield from the 91-day bill auction was 1.003 per cent, i.e. 0.3 basis points higher than on bills with a similar tenor issued on January 28, 2011, representing a bid price of 99.7471 per 100 nominal.

The yield from the 182-day bill auction was 1.326 per cent, i.e. 6.7 basis points higher than on bills with a similar tenor issued on February 4, 2011, representing a bid price of 99.3341 per 100 nominal.

During the week, Treasury Bill trading on the Malta Stock Exchange amounted to €0.38 million, conducted by private brokers.

Today, the Treasury will invite tenders for 91-day bills maturing on May 20, 2011.