On Monday, October 21, 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 €90.61 billion, €0.63 billion lower than the bid amount 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, October 22, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €188 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, October 18. 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 €240.21 billion, with the ECB allotting €188 billion, or 78.26 per cent, of the total bid amount. The marginal rate on the auction was set at 0.12 per cent, with the weighted average rate at 0.09 per cent.

On Wednesday, October 23, 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 0.58 per cent and 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 bills and 273-day bills maturing on November 22 and July 25, 2014, respectively. Bids of €27 million were submitted for the 28-day bills, with the Treasury accepting all bids, while bids of €59.5 million were submitted for the 273-day bills, with the Treasury accepting €5.5 million. Since €23 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €9.5 million, to stand at €444.45 million.

The yield from the 28-day bill auction was 0.489 per cent, i.e. 4.5 basis points higher than on bills with a similar tenor issued on October 18, representing a bid price of 99.9620 per 100 nominal. The yield from the 273-day bill auction was 0.604 per cent, i.e. 0.5 basis point higher than on bills with a similar tenor issued on September 6, representing a bid price of 99.5441 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 91-day bills maturing on November 29 and January 31, 2014, respectively.