On Monday, October 29, the ECB announced its weekly Main Refinancing Operation (MRO). The auction was conducted on Tuesday, October 30, and attracted bids from euro area eligible counterparties of €83.73 billion, €6.44 billion higher than the bid amount for the previous week. The amount was allotted in full at a fixed rate equivalent to the prevailing main refinancing rate of 0.75 per cent, in accordance with current ECB policy.
On Tuesday, October 30, the ECB also conducted an auction for a seven-day fixed-term deposit intended to absorb €209.5 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, October 26. 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 0.75 per cent. It attracted bids amounting to €404.05 billion, with the ECB allotting €209.5 billion, or 51.85 per cent of the total bid amount. The marginal rate on the auction was set at 0.01 per cent, with the weighted average rate also set at 0.01 per cent.
On Wednesday, October 31, 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 €6.16 billion from euro area eligible counterparties, which amount was allotted in full, in accordance with current ECB policy.
Furthermore, on Wednesday, October 31, the ECB also conducted a seven-day US dollar funding operation through collateralised lending in conjunction with the US Federal Reserve. This operation attracted bids of $3.15 billion, which was allotted in full at a fixed rate of 0.66 per cent.
Domestic Treasury bill market
In the domestic primary market for Treasury bills, the Treasury invited tenders for 28-day bill and 273-day bills maturing on November 30 and August 2, 2013, respectively. Bids of €30.8 million were submitted for the 28-day bills, with the Treasury accepting €25.65 million, while bids of €34.32 million were submitted for the 273-day bills with the Treasury accepting €10.32 million.
Since €33.25 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €2.73 million, to stand at €260.25 million.
The yield from the 28-day bill auction was 1.066 per cent, i.e. three basis points higher than on bills with a similar tenor issued on October 26, representing a bid price of 99.9172 per 100 nominal. The yield from the 273-day bill auction was 1.298 per cent, i.e. 12.6 basis points lower than on bills with a similar tenor issued on September 28, representing a bid price of 99.0253 per 100 nominal.
During the week under review, Treasury bill trading on the Malta Stock Exchange amounted to €1.45 million and was conducted by the Central Bank of Malta in its role as market-maker. Concurrently, the Bank conducted an off-exchange transaction amounting to €6 million.
Today, the Treasury will invite tenders for 28-day bills maturing on December 7.