On Monday, February 25, the European Central Bank (ECB) announced its weekly main refinancing operation (MRO). The auction was conducted the following day and attracted bids from euro area eligible counterparties of €131.12 billion, €1.06 billion lower 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 0.75 per cent, in accordance with current ECB policy.
On Tuesday, February 26, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €205.5 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, February 22. 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 €311.97 billion, with the ECB allotting €205.5 billion or 65.87 per cent of the total bid amount. The marginal rate on the auction was set at 0.04 per cent, with the weighted average rate at 0.03 per cent.
On Wednesday, February 27, 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 €8.33 billion from euro area eligible counterparties, which amount was allotted in full in accordance with current ECB policy.
Furthermore on Wednesday, 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 $0.38 billion, which was allotted in full at a fixed rate of 0.65 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 $6.80 billion, which was allotted in full at a fixed rate of 0.64 per cent.
Domestic Treasury bill market
In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day bills maturing on May 31. Bids of €45.55 million were submitted for the bills, with the Treasury accepting only €1.5 million.
Since €1.75 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €0.25 million, to stand at €293.90 million.
The yield from the 91-day bill auction was 0.756 per cent, i.e. 1.3 basis points lower than on bills with a similar tenor issued on February 22, representing a bid price of 99.8093 per 100 nominal.
During the week under review, Treasury bill trading on the Malta Stock Exchange amounted to €0.03 million and was conducted by the Central Bank of Malta in its role as market-maker.
Today, the Treasury will invite tenders for 90-day bills maturing on June 6.