On Monday, November 17, the ECB announced its weekly Main Refinancing Operation (MRO). This attracted bids for €338.01 billion from euro area eligible counterparties, which amount was totally allotted, as pre-announced, at a fixed rate equivalent to the main refinancing rate of 3.25 per cent.
On the same day, the Eurosystem and the Swiss National Bank (SNB) conducted a EUR/CHF foreign exchange swap, with a seven-day maturity, to provide Swiss franc liquidity against the euro. This operation attracted bids for €12.54 billion, which amount was fully allotted at a fixed price of -6.95 swap points.
On Tuesday, November 18, the ECB, in conjunction with the US Federal Reserve, conducted a 28-day US dollar funding operation through collateralised lending. This attracted bids for $52.29 billion, which amount was fully allotted at a fixed rate of 1.51 per cent. In parallel with this operation, the Eurosystem also offered 28-day dollar liquidity through a EUR/USD foreign exchange swap operation which attracted bids for $4.85 billion, which amount was fully allotted at a fixed price of -9.64 swap points.
The following day, the ECB, in conjunction with the US Federal Reserve, conducted an eight-day US dollar funding operation through collateralised lending. This attracted bids for $72.47 billion, which amount was fully allotted at a fixed rate of 1.48 per cent. In parallel with this operation, the Eurosystem also offered eight-day dollar liquidity through a EUR/USD foreign exchange swap operation which attracted bids for $0.94 billion, which amount was fully allotted at a fixed price of -3.29 swap points.
On the same day, the Eurosystem, in cooperation with the SNB, conducted another EUR/CHF foreign exchange swap, this time with an 84-day maturity. This operation attracted bids for €0.54 billion, which amount was again fully allotted at a fixed price of -65.17 swap points.
In the domestic primary market for Treasury bills, the Treasury invited tenders for 182-day bills maturing on May 22, next year. Bids for €27.45 million were submitted, with the Treasury accepting €2.77 million. Since €3.63 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €0.86 million to €367.48 million. The yield resulting from the auction was 3.693 per cent, 85.9 basis points lower than that on bills with a similar tenor issued on October 3. This substantial decrease reflected the impact of the 50 basis point cut in the ECB's minimum bid rate for main refinancing operations (MRO), effective from November 12, as well as expectations of further cuts in the rate. The latest yield represented a bid price of 98.1672 per 100 nominal.
Today the Treasury will invite tenders for 273-day bills maturing on August 28, 2009.
Treasury bill trading on the Malta Stock Exchange amounted to €2.09 million during the week, with all trades being conducted by the Central Bank of Malta in its role as market maker.