On Monday, August 19, the European Central Bank (ECB) announced its weekly main refinancing operation (MRO). The auction was conducted on Tuesday, August 20, and attracted bids from euro area eligible counterparties of €97.73 billion, €0.17 billion higher 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.

Also, on Tuesday, August 20, 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 16.

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 €283.98 billion, with the ECB allotting €192.5 billion, or 67.79 per cent, of the total bid amount. The marginal rate on the auction was set at 0.11per cent, with the weighted average rate at 0.10 per cent.

On Wednesday, August 21, 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 91-day bills maturing on November 22. Bids of €39 million were submitted, with the Treasury accepting €5 million. Since €2 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €3 million, to stand at €377.2 million.

The yield from the 91-day bill auction was 0.473 per cent, i.e. 1.2 basis points higher than on bills with a similar tenor issued on August 16, representing a bid price of 99.8806 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 and for 182-day bills maturing on November 29 and February 28, 2014, respectively.

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