On Monday, January 23, the ECB announced its weekly Main Refinancing Operation (MRO). The auction was conducted on Tuesday, January 24, and attracted bids from euro area eligible counterparties of €130.32 billion, €3.44 billion higher 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.
On Tuesday, January 24, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €219 billion. This operation was 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, January 20.
The auction was carried out at a variable rate, with euro area eligible counterparties allowed to place up to four bids at a maximum rate of one per cent. It attracted bids amounting to €345.65 billion, with the ECB allotting €219 billion, or 63.36 per cent, of the total amount bid for. The marginal rate on the auction was set at 0.3 per cent, with the weighted average rate at 0.28 per cent.
Also on Tuesday, January 24, 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 €19.58 billion from euro area eligible counterparties, which amount was allotted in full, in accordance with current ECB policy.
On Wednesday, January 25, 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 $7.93 billion, which were allotted in full at a fixed rate of 0.6 per cent.
Domestic Treasury bill market
In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day and 182-day bills maturing on April 27 and July 27 respectively. Bids of €54.05 million were submitted for the 91-day bills, with the Treasury accepting €12.65 million, while bids of €52 million were submitted for the 182-day bills, with the Treasury accepting €15 million.
Since €32.8 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €5.15 million, to stand at €216.67 million.
The yield from the 91-day bill auction was 0.692 per cent, i.e. 0.8 basis points lower than on bills with a similar tenor issued on January 20 representing a bid price of 99.8254 per 100 nominal. The yield from the 182-day bill auction was 1.017 per cent, i.e. 1.7 basis points higher than on bills with a similar tenor issued on January 20 representing a bid price of 99.4885 per 100 nominal.
During the week under review, Treasury bill trading on the Malta Stock Exchange amounted to €0.7 million and was conducted by the Central Bank of Malta in its role as market-maker.
Today, the Treasury will invite tenders for 91-day bills and 182-day bills maturing on May 4 and August 3 respectively.