On Monday, July 15, 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 €104.43 billion, €2.36bln 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, July 16, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €195.50bln. 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, July 12. 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 €239.28bln, with the ECB allotting €195.50bln, or 81.70 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 0.10 per cent.
On Wednesday, July 17, 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 0.60 per cent and did not attract bids from euro area eligible counterparties.
Also on Wednesday, July 17, the ECB, in conjunction with the US Federal Reserve, conducted an 84-day US dollar funding operation through collateralised lending. This attracted bids of $0.03bln, which was allotted in full at a fixed rate of 0.61 per cent.
Domestic Treasury bill market
In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day bills maturing on October 18. Bids of €74.5 million were submitted, with the Treasury accepting €20m. Since €39.7m worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €19.7m, to stand at €299.28m.
The yield from the 91-day bill auction was 0.477 per cent, i.e. 3.9 basis points lower than on bills with a similar tenor issued on July 12, representing a bid price of 99.8796 per 100 nominal.
During the week, the Central Bank of Malta, in its role as market-maker, purchased €0.05m worth of Treasury bills on the off-exchange system.
Today the Treasury will invite tenders for 91-day bills and 182-day bills maturing on October 25, and January 24, 2014, respectively.