On Monday, September 28, the European Central Bank (ECB) announced its weekly Main Refinancing Operation (MRO). This auction, which was conducted on Tuesday, attracted bids for €66.77 billion from euro area eligible counterparties, €18.23 billion less than in the previous week. The bid amount was allotted in full at a fixed rate equivalent to the prevailing main refinancing rate of one per cent in accordance with the current ECB policy.
On Monday, September 28, 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 €6.89 billion, with all bids being allotted in full at a fixed price of -0.83 swap points.
On Tuesday, September 29, the ECB announced its second longer-term refinancing operation (LTRO) with a maturity of 364 days. This operation attracted 589 bids for €75.24 billion from euro area eligible counterparties, which amount was allotted in full at a fixed rate equivalent to the prevailing main refinancing rate of one per cent. This bid amount was €367 billion less than in the previous LTRO with a similar tenor conducted on June 24. The next 12-month LTRO is scheduled for December 15. The rate on the next auction may include a spread in addition to the rate on the MRO, depending on the circumstances at the time.
Also on September 29, the ECB announced a standard LTRO with a maturity of 77 days. In this LTRO, the ECB received bids for €2.77 billion, which amount was allotted in full at a fixed rate equivalent to the prevailing main refinancing rate of one percent.
On Wednesday, September 30, the ECB, in conjunction with the US Federal Reserve, conducted a seven-day US dollar funding operation through collateralised lending. This attracted bids for $34.10 billion, which amount was allotted in full at a fixed rate of 1.15 per cent.
In the domestic primary market for Treasury bills, the Treasury invited tenders for 181-day bills maturing on April 1, 2010. Bids for €30.56 million were submitted, with the Treasury allotting the full amount.
Since €18.91 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €11.66 million to €571.41 million. The yield resulting from the auction was 1.581 per cent, i.e. 1.4 basis points higher than that on bills with a similar tenor issued on September 18. The latest yield represented a bid price of 99.2114 per 100 nominal.
Today, the Treasury will invite tenders for 91-day bills maturing on January 8, 2010 and 182-day bills maturing on April 9, 2010.
Treasury bill trading on the Malta Stock Exchange amounted to €9.05 million during the week, with all trades being conducted by the Central Bank of Malta in its role as market maker. Off-exchange transactions amounted to €2.73 million.