On Monday, September 23, the European Central Bank (ECB) announced its weekly main refinancing operation (MRO). The auction was conducted on Tuesday, September 24, and attracted bids from euro area eligible counterparties of €97.03 billion, €0.78 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, September 24, 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 20. 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 €248.47 billion, with the ECB allotting €190.5 billion, or 76.67 per cent, of the total bid amount. The marginal rate on the auction was set at 0.19 per cent, with the weighted average rate at 0.11 per cent.
On Wednesday, September 25, 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 €8.61 billion from euro area eligible counterparties, which amount was allotted in full in accordance with current ECB policy.
Also on Wednesday, September 25, the ECB conducted an eight-day US dollar funding operation through collateralised lending in conjunction with the US Federal Reserve. This operation attracted bids of $0.33 billion, which was allotted in full at a fixed rate of 0.58 per cent.
Domestic Treasury bill market
In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day bills and 182-day bills maturing on December 27 and March 28, 2014, respectively. Bids of €31 million were submitted for the 91-day bills, with the Treasury accepting €15 million, while bids of €25 million were submitted for the 182-day bills, with the Treasury accepting €0.5 million. Since €19 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €3.5 million, to stand at €422.65 million.
The yield from the 91-day bill auction was 0.499 per cent, i.e. 0.9 basis point higher than on bills with a similar tenor issued on September 20, 2013, representing a bid price of 99.8740 per 100 nominal. The yield from the 182-day bill auction was 0.550 per cent, i.e. 0.1 basis point lower than on bills with a similar tenor issued on August 30, 2013, representing a bid price of 99.7227 per 100 nominal.
During the week under review, there was no trading on the Malta Stock Exchange.
Today, the Treasury will invite tenders for 28-day bills and 182-day bills maturing on November 1 and April 4, 2014, respectively.