On Monday, October 10, the ECB announced its weekly Main Refinancing Operation. The auction was conducted on Tuesday, October 11, and attracted bids from euro area eligible counterparties of €204.94 billion, €6.06 billion higher than the amount bid for in the previous week. The amount 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, October 11, the ECB conducted a Special Term Refinancing Operation with a maturity of 28 days. This attracted bids of €59.06 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, October 11, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €163 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, October 7. 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 €241.58 billion, with the ECB allotting €163 billion or 67.47 per cent of the total amount bid for. The marginal rate on the auction was set at 0.98 per cent, with the weighted average rate at 0.95 per cent.

Furthermore, on Tuesday, October 11, 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 1.50 per cent. The operation attracted bids of €273.92 billion, with the ECB accepting €273.82 billion or 99.96 per cent. The marginal rate on the operation was set at 1.30 per cent, while the weighted average rate was 1.27 per cent.

On Wednesday, October 12, 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 1.08 per cent.

On the same day, in accordance with the Governing Council decision of September 15, 2011, the ECB, in conjunction with the US Federal Reserve, conducted an 84-day US dollar funding operation through collateralised lending. This attracted bids for $1.35 billion, which amount 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 91-day bills and 273-day bills maturing on January 13, 2012 and on July 13, 2012, respectively. Bids of €54.75 million were submitted for the 91-day bills, with the Treasury accepting only €6.3 million, while bids of €52.55 million were submitted for the 273-day bills, with the Treasury accepting €30 million. Since €39.84 million worth of bills matured during the week, the outstanding balance of ­Treasury Bills decreased by €3.54 million, to stand at €312.64 million.

The yield from the 91-day bill auction was 1.328 per cent, i.e. 2.9 basis points higher than that on bills with a similar tenor issued on October 7, 2011, representing a bid price of 99.6654 per 100 nominal. The yield from the 273-day bill auction was 1.5760 per cent, i.e. 3.2 basis points lower than that on bills with a similar tenor issued on July 15, 2011, representing a bid price of 98.8190 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 November 18, 2011 and January 20, 2012, respectively.