On Monday, December 9, the European Central Bank (ECB) announced its weekly main refinancing operation (MRO). The auction was conducted on Tuesday, December 10, and attracted bids from euro area eligible counterparties of €98.49 billion, €3.87 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 0.25 per cent, in accordance with current ECB policy.
On Tuesday, December 10, the ECB conducted a special-term refinancing operation with a maturity of 35 days. This attracted bids of €10.14 billion, which was allotted in full at a fixed rate equivalent to the prevailing MRO rate of 0.25 per cent, also in accordance with the current ECB policy.
Also on Tuesday, December 10, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €184 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, December 6.
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 €186.73 billion, with the ECB allotting €184 billion, or 98.54 per cent, of the total bid amount. The marginal rate on the auction was set at 0.25 per cent, with the weighted average rate at 0.19 per cent.
On Wednesday, December 11, 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 0.59 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 92-day and 274-day bills maturing on March 14 and September 12, respectively.
Bids of €38.5 million were submitted for the 92-day bills, with the Treasury accepting €5.0 million, while bids of €30.5 million were submitted for the 274-day bills, with the Treasury accepting €10.5 million. Since €43.1 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €27.6 million, to stand at €300.32 million.
The yield from the 92-day bill auction was 0.4 per cent, i.e. 2.6 basis points lower than on bills with a similar tenor issued on December 6, representing a bid price of 99.8979 per 100 nominal. The yield from the 274-day bill auction was 0.584 per cent, i.e. 2.0 basis points lower than on bills with a similar tenor issued on October 25, representing a bid price of 99.5575 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 March 21 and June 20 respectively.