On Monday, July 22, the European Central Bank (ECB) announced its weekly main refin-ancing operation (MRO). The auction was conducted on Tuesday and attracted bids from euro-area eligible counterparties of €102.3 billion, €2.13 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 0.50 per cent, in accordance with current ECB policy.
Also on Tuesday the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €195.5 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, July 19.
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 €231.32 billion, with the ECB allotting €195.5 billion, or 84.52 per cent, of the total bid amount. The marginal rate on the auction was set at 0.14 per cent, with the weighted average rate at 0.11 per cent.
On Wednesday, July 24, the ECB conducted an eight-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 the euro area.
Domestic Treasury bill market
In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day and 182-day bills maturing on October 25, 2013, and January 24, 2014, respectively. Bids of €45.61 million were submitted for the 91-day bills, with the Treasury accepting €3 million, while bids of €66.0 million were submitted for the 182-day bills, with the Treasury accepting €2 million. Since €24.11 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €19.11 million, to stand at €280.17 million.
The yield from the 91-day bill auction was 0.467 per cent, i.e. one basis point lower than on bills with a similar tenor issued on July 19, representing a bid price of 99.8821 per 100 nominal. The yield from the 182-day bill auction was 0.605 per cent, i.e. 6.4 basis points lower than on bills with a similar tenor issued on July 12, representing a bid price of 99.6951 per 100 nominal.
During the week under review, there was no trading on the Malta Stock Exchange.
Today, the Treasury invites tenders for 91-and 273-day bills maturing on November 1, 2013, and May 2, 2014, respectively.