On Monday, May 14, the ECB announced its weekly Main Refinancing Operation. The auction was conducted on Tuesday, May 15, and attracted bids from euro area eligible counterparties of €42.99 billion, €3.70 billion higher than the bid amount of the previous week. This was allotted in full at a fixed rate equivalent to the prevailing main refinancing rate of one per cent in accordance with current ECB policy.

On Tuesday, May 15, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €214 billion. This operation is 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, May 11.

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 one per cent.

It attracted bids amounting to €468.09 billion, with the ECB allotting €214 billion, or 45.72 per cent, of the total bid amount. The marginal rate on the auction was set at 0.26 per cent, with the weighted average rate also at 0.26 per cent.

On Wednesday, May 16, 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 $0.30 billion, which was allotted in full at a fixed rate of 0.66 per cent.

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 August 17 and November 16, 2012, respectively.

Bids of €17.85 million were submitted for the 91-day bills, with the Treasury accepting €5.5 million, while bids of €10 million were submitted for the 182-day bills, with the Treasury accepting €4 million. Since €1.60 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €7.9 million, to stand at €253.30 million.

The yield from the 91-day bill auction was 1.009 per cent, i.e. two basis points higher than on bills with a similar tenor issued on May 11, 2012, representing a bid price of 99.7456 per 100 nominal.

The yield from the 182-day bill auction was 1.190 per cent, i.e. 4.2 basis points higher than on bills with a similar tenor issued on May 11, representing a bid price of 99.4020 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 and 182-day bills maturing on August 24 and November 23, respectively.