On Thursday, September 3, the Governing Council of the European Central Bank (ECB) decided to keep the interest rate on its main refinancing operations unchanged at on per cent. Interest rates on the marginal lending facility and the deposit facility also remained unchanged, at 1.75 per cent and 0.25 per cent respectively. The Governing Council also decided that the rate for the 12-month longer-term refinancing operation to be allotted on September 30, 2009 will likewise be at one per cent.
On Monday, August 31, the ECB announced its weekly Main Refinancing Operation (MRO). This auction, which was conducted on Tuesday, attracted bids for €72.09 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 in accordance with the current ECB policy.
Also on Monday, August 31, 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 euro. This operation attracted bids for €10.60 billion, and all bids were allotted in full at a fixed price of -0.81 swap points.
On Wednesday, September 2, the ECB, in conjunction with the US Federal Reserve, conducted a US dollar funding operation with a tenor of seven-days. This attracted bids for $41.58 billion, which amount was allotted in full at a fixed rate of 1.17 per cent.
In the domestic primary market for Treasury Bills, the Treasury invited tenders for 91-day bills maturing on December 4, 2009 and 182-day bills maturing on March 5, 2010. Bids for €40.50 million were submitted for the 91-day bills, with the Treasury accepting €23.31 million, while bids for €18.90 million were submitted for the 182-day bills, with the Treasury accepting €15.83 million. Since €63.34 million worth of bills matured during the week, the outstanding balance of Treasury Bills decreased by €24.20 million to €577.85 million.
The yield resulting from the 91-day bill auction was 1.45 per cent, 2.3 basis points lower than that on bills with a similar tenor issued on August 21, 2009. The latest yield on such bills represented a bid price of 99.6348 per 100 nominal. The yield resulting from the 182-day bill auction was 1.59 per cent, that is, 6.1 basis points lower than that on bills with a similar tenor issued on August 7, 2009. The yield on these bills represented a bid price of 99.2026 per 100 nominal.
Today, the Treasury will invite tenders for 91-day bills maturing on December 11, 2009.
Treasury Bill trading on the Malta Stock Exchange amounted to €2.04 million during the week, with €1.14 million being conducted by the Central Bank of Malta in its role as market maker and €0.9 million being conducted by other brokers.