On November 8, the ECB announced its weekly MRO. The auction was conducted on November 9, and attracted bids from euro area eligible counterparties of €175.03 billion, €3.32 billion less than the amount bid for 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 current ECB policy.
On November 9, the ECB conducted a Special Term Refinancing Operation (STRO) with a maturity of 28 days. This attracted bids of €63.62 billion, which were allotted in full at a fixed rate equivalent to the prevailing main refinancing rate of one per cent, also in accordance with current ECB policy.
On the same day, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €64 billion. The operation was designed to sterilise the effect of purchases made under the Securities Market Programme and settled by November 5.
The auction was carried out at a variable rate, with euro area eligible counterparties allowed to place up to two bids at a maximum rate of one per cent. It attracted bids of €72.70 billion, with the ECB allotting the full intended volume of €64 billion, or 88.03 per cent of the total amount bid for. The marginal rate on the auction was set at 0.80 per cent, with the weighted average rate standing at 0.68 per cent.
Also on November 9, being the last day of the reserve deposit maintenance period, the ECB conducted an overnight Fine-tuning Liquidity Absorbing Operation carried out at a variable rate, with counterparties allowed to place up to two bids at a maximum of one per cent. The operation attracted bids of €148.48 billion, with the ECB accepting €148.38 billion, or 99.93 per cent of the total amount bid for. The marginal rate on the operation was set at 0.80 per cent, while the weighted average rate was 0.78 per cent.
On November 10, the ECB conducted a six-day US dollar funding operation through collateralised lending in conjunction with the US Federal Reserve. This attracted bids of $0.07 billion, which was allotted in full at a fixed rate of 1.19 per cent.
On November 11, in line with the press release dated September 2, the ECB carried out a liquidity providing six-day fine-tuning operation in the form of a fixed rate tender with full allotment.
The operation was designed to smooth out the liquidity effects of the six-month LTRO which matured on November 11. The auction attracted bids of €12.55 billion, which were allotted in full at the prevailing main refinancing rate of one per cent. Meanwhile, in the domestic primary market for Treasury Bills, the Treasury invited tenders for 28-day bills maturing on December 10, and for 273-day bills maturing on August 12, 2011.
Bids of €22.5 million were submitted for the 28-day bills, with the Treasury accepting €12.25 million, while bids of €81.18 million were submitted for the 273-day bills, with the Treasury accepting just €6.63 million. Since €28.41 million worth of bills matured during the week, the outstanding balance of Treasury Bills decreased by €9.54 million, to stand at €453.73 million.
The yield from the 28-day bill auction was 0.819 per cent, i.e. 0.2 basis points higher than on bills with a similar tenor issued on November 5, representing a bid price of 99.9363 per 100 nominal. The yield from the 273-day bill auction was 1.3150 per cent, i.e. 46.5 basis points higher than on bills with a similar tenor issued on October 15, representing a bid price of 99.0126 per 100 nominal.
Treasury Bill trading on the Malta Stock Exchange amounted to €3.1 million during the week, with €2.4 million bills traded by the Central Bank of Malta in its role as market maker and €0.7 million bills transacted by other brokers. Concurrently, all off-exchange trading amounting to €0.16 million were transacted by the Central Bank of Malta.
Today the Treasury will invite tenders for 91-day bills maturing on February 18, 2011.