On Monday, February 8, the European Central Bank (ECB) announced its weekly Main Refinancing Operation (MRO). This auction, which was conducted last Tuesday, attracted bids for €76.08 billion from euro area eligible counterparties, €20.26 billion more than the amount bid for 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.
The following day, the ECB conducted a Special Term Refinancing Operation (STRO) with a maturity of 28 days.
This attracted bids for €2.76 billion, and the bid amount was again 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 the same day, it being the end of the reserve deposit maintenance period, the ECB also conducted an overnight fine-tuning liquidity absorbing operation. This was carried out at a variable rate, with counterparties allowed to place up to two bids at a maximum rate of one per cent.
The operation attracted bids for €270.78 billion, of which the ECB accepted €270.57 billion, or 99.92 per cent of the total amount bid for. The marginal rate on this operation was set at 0.80 per cent, while the weighted average rate was 0.76 per cent.
In the domestic primary market for Treasury Bills, the Treasury invited tenders for 91-day bills maturing on May 14, 2010. Bids for €91.11 million were submitted, with the Treasury allotting €22 million. Since €17.62 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €4.38 million to €476.72 million.
The yield resulting from the auction was 1.12 per cent, i.e. 8.4 basis points less than that on bills with a similar tenor issued on January 29. The latest yield represented a bid price of 99.7177 per 100 nominal.
Today, the Treasury will invite tenders for 91-day bills maturing on May 21.
Treasury Bill trading on the Malta Stock Exchange amounted to €1.18 million during the week, with €0.02 million trades being conducted by the Central Bank of Malta in its role as market maker and €1.16 million trades being conducted by other brokers.