On Monday, July 25, the European Central Bank announced its weekly main refinancing operation (MRO). The operation was conducted the following day and attracted bids from euro area eligible counterparties of €49.59 billion, €6.02 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 zero per cent, in accordance with current ECB policy.
On Wednesday, July 27, 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 operation attracted bids of €7.01 billion from euro area eligible counterparties. The amount was allotted in full in accordance with current ECB policy.
Also on Wednesday, July 27, 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 $0.80 billion, which was allotted in full at a fixed rate of 0.88 per cent.
Domestic Treasurybill market
In the domestic primary market for Treasury bills, the Treasury invited tenders for 28-day and 91-day bills, maturing on August 25 and October 27. Bids of €5 million were submitted for the 28-day bills, with the Treasury accepting €2 million, while bids of €70 million were submitted for the 91-day bills, with the Treasury accepting €15 million. Since €17 million worth of bills matured during the week, the outstanding balance of Treasury bills remain unchanged at €300.25 million.
The yield from the 28-day bill auction was -0.341 per cent, down by 33.4 basis points from bids with a similar tenor issued on December 3, 2015, representing a bid price of 100.0265 per 100 nominal.
The yield from the 91-day bill auction was -0.314 per cent, also down by 1.4 basis points from bids with a similar tenor also issued on July 21, representing a bid price of 100.0794 per 100 nominal.
During the week under review, there was no trading on the Malta Stock Exchange.
Today, the Treasury will invite tenders for 28-day and 91-day bills maturing on September 1 and November 3, respectively.