On Monday, September 16, 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 €96.25 billion, €0.92 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.

Also on Tuesday, September 17, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €190.5 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, September 13. 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 €272.92 billion, with the ECB allotting €190.5 billion, or 69.80 per cent, of the total bid amount. The marginal rate on the auction was set at 0.09 per cent, with the weighted average rate at 0.08 per cent.

On Wednesday, September 18, 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 $0.08 billion, which was allotted in full at a fixed rate of 0.59 per cent.

Domestic Treasury bill market

In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day bills maturing on December 20. Bids of €37.2 million were submitted, with the Treasury accepting €25.2 million. Since €10.45 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €14.75 million, to stand at €426.15 million.

The yield from the 91-day bill auction was 0.49 per cent, i.e. 0.1 basis point lower than on bills with a similar tenor issued on September 13, representing a bid price of 99.8763 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 182-day bills maturing on December 27 and March 28, 2014, respectively.

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