On Monday, July 11, the ECB announced its weekly Main Refinancing Operation. The auction was conducted on Tuesday, July 12, and attracted bids from euro area eligible counterparties of €153.60 billion, €33.58 billion higher than the amount bid for in the previous week. The amount bid for was allotted in full at a fixed rate equivalent to the prevailing main refinancing rate of 1.50 per cent, in accordance with current ECB policy.
On Tuesday, July 12, the ECB conducted a Special Term Refinancing Operation with a maturity of 28 days. This attracted bids of €67.75 billion, which were allotted in full at a fixed rate equivalent to the prevailing main refinancing rate of 1.50 per cent, also in accordance with the current ECB policy.
Also on Tuesday, July 12, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €74 billion. This operation is designed to sterilise the effect of purchases made under the Securities Markets Programme that were settled but had not yet matured by the previous Friday, July 8. 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 1.50 per cent. It attracted bids amounting to €91.90 billion, with the ECB allotting €74 billion or 80.52 per cent of the total amount bid for. The marginal rate on the auction was set at 1.46 per cent, with the weighted average rate at 1.39 per cent.
Furthermore, on Tuesday, July 12, being the last day of the reserve deposit maintenance period, the ECB conducted an overnight Fine-tuning Liquidity Absorbing Operation at a variable rate, with counterparties allowed to place up to two bids at a maximum rate of 1.25 per cent. The operation attracted bids of €75.40 billion, with the ECB accepting €74.81 billion or 99.21 per cent of the total amount bid for. The marginal rate on the operation was set at 1.05 per cent, while the weighted average rate was 1.03 per cent.
On Wednesday, July 13, the ECB conducted a seven-day US dollar funding operation through collateralised lending in conjunction with the US Federal Reserve. This operation was carried out at a fixed rate of 1.08 per cent and, once more, no bids were placed by euro area eligible counterparties.
Domestic Treasury Bill market
In the domestic primary market for Treasury Bills, the Treasury invited tenders for 91-day and 273-day bills maturing on October 14, 2011 and April 13, 2012, respectively. Bids of €22.61 million were submitted for the 91-day bills, with the Treasury accepting only €3.84 million, while bids of €36.15 million were submitted for the 273-day bills, with the Treasury accepting €23.15 million.
Since €27.85 million worth of bills matured during the week, the outstanding balance of Treasury Bills decreased by €0.86 million, to stand at €342.60 million.
The yield from the 91-day bill auction was 1.097 per cent, i.e. 1.3 basis points higher than that on bills with a similar tenor issued on July 08, 2011, representing a bid price of 99.7235 per 100 nominal.
The yield from the 273-day bill auction was 1.6080 per cent, i.e. 13.1 basis points higher than on bills with a similar tenor issued on July 08, 2011, representing a bid price of 98.7953 per 100 nominal.
During the week under review, there was no trading on the Malta Stock Exchange.
Today, the Treasury will invite tenders for 28-day bills and 91-day bills, maturing on August 19, 2011 and October 21, 2011, respectively.