On Friday, November 22, the Governing Council of the European Central Bank (ECB) decided to suspend repayments of the three-year longer-term refinancing operations during the year-end period, in view of the expected low interest and the concentration of other operations owing to public holidays.
Consequently, the last repayment of the year will be settled on December 23 and the amount of the repayment will be announced on December 20. Repayment operations will resume in 2014 with a settlement on January 15. The amount of this repayment will be announced on January 10. The repayments that were tentatively scheduled for settlement on December 30 andJanuary 8, 2014, will not take place.
ECB monetary operations
On Monday, November 18, the ECB announced its weekly main refinancing operation (MRO). The auction was conducted the following day and attracted bids from euro area eligible counterparties of €86.88 billion, €0.86 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 0.25 per cent, in accordance with current ECB policy.
On Tuesday, November 19, 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, November 15. 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 €218.12 billion, with the ECB allotting €184 billion, or 84.36 per cent, of the total bid amount. The marginal rate on the auction was set at 0.11 per cent, with the weighted average rate at 0.09 per cent.
On Wednesday, November 20, 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 0.58 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 28-day bills maturing on December 20. Bids of €65.5 million were submitted, with the Treasury accepting €24.5 million. Since €38 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €13.5 million, to stand at €328.85 million.
The yield from the 28-day bill auction was 0.401 per cent, i.e. 1.9 basis points lower than on bills with a similar tenor issued on November 15, representing a bid price of 99.9688 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 bills and 91-day bills maturing on December 27 and February 28, 2014, respectively.