On Monday, July 20, the ECB announced its weekly main refinancing operation. This auction, which was conducted on Tuesday, attracted bids for €88.27 billion from euro area eligible counterparties, €12.02 billion less than in the previous week. All bids were allotted in full at a fixed rate equivalent to the main refinancing rate of one per cent in accordance with the current ECB policy.
The amount of bids and allotments through the main refinancing operation (MRO) has been on a decreasing trend since the operation settling on July 8, reflecting the impact of the exceptionally huge amount allotted in the one-year LTRO of June 24.
On Monday, July 20, the Eurosystem and the Swiss National Bank 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 €14.19 billion (which was below the intended amount of €25 billion), and all bids were allotted in full at a fixed price of -0.9 swap points.
On Wednesday, July 22, 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 $42.40 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 273-day bills maturing on April 23, 2010. Bids for €28.50 million were submitted, with the Treasury allotting €19.89 million. Since €19.24 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €0.65 million to €586.56 million.
The yield resulting from the auction was 1.73 per cent, i.e. 1.8 basis points lower than that on bills with a similar tenor issued on July 3. The latest yield represented a bid price of 98.7051 per 100 nominal.
Today the Treasury will invite tenders for 91-day bills maturing on October 30.
Treasury bill trading on the Malta Stock Exchange amounted to €0.97 million during the week, with all trades being conducted by the Central Bank of Malta in its role as market maker.