On Monday, September 26, the ECB announced its weekly Main Refinancing Operation. The auction was conducted on Tuesday, September 27, and attracted bids from euro area eligible counterparties of €208.35 billion, €7.20 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, September 27, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €156.50 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, September 23. 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 €202.88 billion, with the ECB allotting €156.50 billion or 77.14 per cent of the total amount bid for. The marginal rate on the auction was set at 1.15 per cent, with the weighted average rate standing at 1.05 per cent.
Also on Tuesday, September 27, the ECB announced a three-month Longer-Term Refinancing Operation 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 €140.63 billion from euro area eligible counterparties, which amount was allotted in full, in accordance with current ECB policy. On Wednesday, September 28, the ECB conducted a seven-day US dollar funding operation through collateralised lending in conjunction with the US Federal Reserve. This operation attracted bids of $0.50 billion, which was allotted in full at a fixed rate of 1.09 per cent.
Domestic Treasury Bill market
In the domestic primary market for Treasury Bills, the Treasury invited tenders for 28-day and 182-day bills maturing on October 28, 2011 and March 30, 2012, respectively. Bids of €24 million were submitted for the 28-day bills, with the Treasury accepting €5 million, while bids of €51.80 million were submitted for the 182-day bills, with the Treasury accepting €10 million. Since €17.98 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €2.98 million, to stand at €305.34 million.
The yield from the 28-day bill auction was 0.950 per cent, i.e. 5 basis points lower than that on bills with a similar tenor issued on September 2, representing a bid price of 99.9262 per 100 nominal. The yield from the 182-day bill auction was 1.450 per cent, i.e. 10.5 basis points lower than that on bills with a similar tenor issued on September 23, representing a bid price of 99.2723 per 100 nominal.
During the week under review, trading on the Malta Stock Exchange amounted to €0.66 million conducted by the Central Bank of Malta in its role as market- maker.
Today, the Treasury will invite tenders for 91-day bills and 181-day bills maturing on January 6, 2012 and April 5, 2012, respectively.