On Monday, March 26, the ECB announced its weekly Main Refinancing Operation (MRO). The auction was conducted on Tuesday, March 27, and attracted bids from euro area eligible counterparties of €61.08 billion, €1.54 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, March 27, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €213.5 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, March 23. 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 €322.94 billion, with the ECB allotting €213.5 billion or 66.11 per cent of the total bid amount. The marginal rate on the auction was set at 0.26 per cent, with the weighted average rate at 0.26 per cent.
On Wednesday, March 28, the ECB conducted 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 €25.13 billion from euro area eligible counterparties, which amount was allotted in full, in accordance with current ECB policy.
Furthermore, on Wednesday, March 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 $2.88 billion, which were allotted in full at a fixed rate of 0.63 per cent.
On the same day, the ECB, in conjunction with the US Federal Reserve, conducted an 84-day US dollar funding operation through collateralised lending. This attracted bids of $6.25 billion, which amount was allotted in full at a fixed rate of 0.63 per cent.
Domestic Treasury bill market
In the domestic primary market for Treasury bills, the Treasury invited tenders for 90-day bills maturing on June 28, 2012. Bids of €13.8 million were submitted for the bills, with the Treasury accepting the full amount. Since €10.5 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €3.3 million, to stand at €217.11 million.
The yield from the 90-day bill auction was 0.837 per cent, i.e. one basis point lower than that on bills with a similar tenor issued on March 23, representing a bid price of 99.7912 per 100 nominal.
During the week under review, trading amounted to only €122,000 conducted by the Central Bank of Malta on the off-exchange market of the Malta Stock Exchange.
Today, the Treasury will invite tenders for 92-day bills and 274-day bills maturing on July 6, and on January 4, 2013, respectively.