On Monday, January 27, the European Central Bank (ECB) announced its weekly main refinancing operation (MRO). The auction was conducted on Tuesday, January 28, and attracted bids from euro area eligible counterparties of €115.63 billion, €0.65 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 0.25 per cent, in accordance with current ECB policy.
Also on Tuesday, January 28, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €177.5 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, January 24. 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 0.25 per cent. It attracted bids amounting to €151.21 billion, with the ECB allotting the full amount. The marginal rate on the auction was set at 0.25 per cent, with the weighted average rate at 0.24 per cent.
On Wednesday, January 29, 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 €4.96 billion from euro area eligible counterparties, which amount was allotted in full in accordance with current ECB policy.
Also on Wednesday, January 29, 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.
Furthermore on Wednesday, January 29, the ECB, in conjunction with the US Federal Reserve, conducted an 84-day US dollar funding operation through collateralised lending. This attracted bids of $0.23 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 182-day bills maturing on August 1, 2014. Bids of €22.5 million were submitted, with the Treasury accepting all bids. Since €13 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €9.5 million, to stand at €285.67 million.
The yield from the 182-day bill auction was 0.544 per cent, i.e. 10.8 basis points higher than on bills with a similar tenor issued on December 20, 2013, representing a bid price of 99.7257 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 and 182-day bills maturing on May 9 and August 8 respectively.