On Thursday, November 8, the Governing Council of the ECB decided to keep the interest rate on the main refinancing operations (MRO) unchanged at 0.75 per cent. Interest rates on the marginal lending facility and on the deposit facility were also left unchanged, at 1.50 per cent and zero per cent, respectively.
ECB monetary operations
On Monday, November 5, the ECB announced its weekly MRO. The auction was conducted on Tuesday, November 6, and attracted bids from euro area eligible counterparties of €79.47 billion, €4.26 billion lower than the bid amount in 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, November 6, the ECB also conducted an auction for a seven-day fixed-term deposit intended to absorb €208.5 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, November 2.
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 €459.62 billion with the ECB allotting €208.5 billion, or 45.36 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, November 7, 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 $3.17 billion, which was allotted in full at a fixed rate of 0.67 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 $4.12 billion, which amount was allotted in full at a fixed rate of 0.65 per cent.
Domestic Treasury bill market
In the domestic primary market for Treasury bills, the Treasury invited tenders for 28-day bills maturing on December 7. Bids of €28.64 million were submitted with the Treasury accepting €25.06 million. Since €22.5 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €2.56 million, to stand at €262.81 million.
The yield from the 28-day bill auction was 1.062 per cent, i.e. 0.4 basis point lower than on bills with a similar tenor issued on November 2, representing a bid price of 99.9175 per 100 nominal.
During the week under review, Treasury bill trading on the Malta Stock Exchange amounted to €0.6 million and was conducted by the Central Bank of Malta in its role as market-maker.
Today, the Treasury will invite tenders for 28-day bills maturing on December 14.