On Thursday, July 3 following the monthly meeting of the Governing Council, the European Central Bank (ECB) raised the minimum bid rate on its main refinancing operations by 25 basis points to 4.25 per cent. This will become effective as from Wednesday, July 9.
On Monday, June 30, the ECB announced its weekly Main Refinancing Operation (MRO). This attracted bids for €254.7 billion from euro area eligible counterparties, with the ECB allotting €154.5 billion, or 60.66 per cent of the total amount bid for. The marginal rate on the operation, that is the rate at which the total tender allotment was exhausted, was 4.10 per cent, up three basis points from the marginal rate resulting from the previous week's MRO.
On Friday, June 27, the ECB also announced that, once again, in conjunction with the US Federal Reserve, it would provide dollar liquidity to the market through the Term Auction Facility (TAF). This was in order to help satisfy the exceptional need for dollar funding and to facilitate the further normalisation of conditions in the international money market. The operation attracted bids for $84.8 billion, of which $25 billion was allotted at a fixed rate of 2.34 per cent, equivalent to the Marginal Rate on the Federal Reserve System's tender.
In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day bills maturing on October 3. Bids for €54.31 million were submitted, with the Treasury accepting €22.43 million. Since €18.76 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €3.7 million to €423.39 million.
The yield resulting from the auction was 4.927 per cent, 1.5 basis points lower than that on bills with a similar tenor issued on June 27. The latest yield represented a bid price of 98.7699 per 100 nominal.
Today the Treasury will invite tenders for 182-day bills maturing on January 9, 2009. The following week the Treasury will invite tenders for 91-day bills maturing on October 17.
Treasury bill trading on the Malta Stock Exchange amounted to €2.02 million, with the bulk of trades being conducted by the Central Bank of Malta in its role as market maker.