On Monday, August 20, the ECB announced its weekly MRO. The auction was conducted on Tuesday, August 21, and attracted bids from euro area eligible counterparties of €131.25 billion, €0.67 billion higher than the bid amount in the previous week. The amount was allotted in full at a fixed rate equivalent to the prevailing main refinancing rate of 0.75 per cent, in accordance with current ECB policy.
On Tuesday, August 21, the ECB also conducted an auction for a seven-day fixed-term deposit intended to absorb €211.5 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 17.
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 0.75 per cent. It attracted bids amounting to €446.82 billion, with the ECB allotting €211.5 billion or 47.33 per cent of the total bid amount. The marginal rate on the auction was set at 0.01 per cent, with the weighted average rate also set at 0.01 per cent.
On Wednesday, August 22, 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 $8.45 billion, which was allotted in full at a fixed rate of 0.64 per cent.
Domestic Treasury bill market
In the domestic primary market for Treasury bills, the Treasury invited tenders for 27-day and 91-day bills maturing on September 20 and November 23, respectively.
Bids of €6.5 million were submitted for the 27-day bills, with the Treasury accepting the full amount, while bids of €7 million were submitted for the 91-day bills with the Treasury accepting €5 million. Since €6.6 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €4.9 million, to stand at €288.04 million.
The yield from the 27-day bill auction was 1.106 per cent. 0.7 basis points higher than that on bills with a similar tenor issued on August 17, representing a bid price of 99.9171 per 100 nominal. The yield from the 91-day bill auction was 1.216 per cent, i.e. 0.8 basis points higher than on bills with a similar tenor issued on August 17, representing a bid price of 99.6936 per 100 nominal.
During the week under review, Treasury bill trading on the Malta Stock Exchange amounted to €0.5 million and was conducted by the Central Bank of Malta in its role as market-maker.
Today, the Treasury will invite tenders for 28-day bills and 91-day bill maturing on September 28 and November 30, respectively.