On Monday, August 5, 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 €99.41 billion, €9.75 billion lower than the bid amount of the previous week.
The amount was allotted in full at a fixed rate equivalent to the prevailing MRO rate of 0.50 per cent, in accordance with current ECB policy.
On Tuesday, August 6, the ECB conducted a special-term refinancing operation with a maturity of 35 days. This attracted bids of €3.91 billion, which was allotted in full at a fixed rate equivalent to the prevailing MRO rate of 0.50 per cent, also in accordance with the current ECB policy.
Also on Tuesday, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €192.5 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, August 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 0.50 per cent. It attracted bids amounting to €269.31 billion, with the ECB allotting €192.5 billion, or 71.48 per cent, of the total bid amount. The marginal rate on the auction was set at 0.13 per cent, with the weighted average rate at 0.11 per cent.
On Wednesday, August 7, the ECB conducted a seven-day US dollar funding operation through collateralised lending in conjunction with the US Federal Reserve.
This operation was carried out at a fixed rate of 0.59 per cent and once again did not attract bids from euro area eligible counterparties.
Domestic Treasury bill market
In the domestic primary market for Treasury bills, the Treasury invited tenders for 28-day and 273-day bills maturing on September 6, and May 9, 2014, respectively. Bids of €35.4 million were submitted for the 28-day bills, with the Treasury accepting €25 million, while bids of €64 million were submitted for the 273-day bills, with the Treasury accepting €25 million. Since €10 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €40 million, to stand at €342.85 million.
The yield from the 28-day bill auction was 0.452 per cent, i.e. 56.7 basis points lower than on bills with a similar tenor issued on November 30, 2012, representing a bid price of 99.9649 per 100 nominal. The yield from the 273-day bill auction was 0.663 per cent, i.e. 1.8 basis points higher than on bills with a similar tenor issued on August 2, representing a bid price of 99.4997 per 100 nominal.
During the week under review, there was no trading on the Malta Stock Exchange.
Today, the Treasury will invite tenders for 91-day bills maturing on November 15.