Rise in 90-day Treasury bill rate On Monday, May 12, the European Central Bank (ECB) announced its weekly Main Refinancing Operation (MRO).

This operation attracted bids for €208.52 billion from euro area eligible counterparties, with the ECB allotting €191.5 billion, or 91.84 per cent of the total amount bid for.

The marginal rate, which is the rate at which the total tender allotment is exhausted, was set by the ECB at 4.18 per cent, that is eight basis points lower than the marginal rate resulting from the MRO of the previous week.

The following day, being the end of the reserve deposit maintenance period, the ECB also launched a fine tuning liquidity absorbing operation.

The ECB announced it would be absorbing €23.5 billion at a fixed rate of four per cent. This operation attracted bids for €32.46 billion, with the ECB accepting 72.4 per cent of total bids on a pro-rata basis.

In the domestic primary market for Treasury bills, the Treasury invited tenders for 90-day bills maturing on August 14. Bids for €29.34 million were submitted, with the Treasury accepting all bids.

As €10.24 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €19.10 million to €353.3 million. The yield resulting from the auction was 4.674 per cent, 6.2 basis points higher than that on bills with a similar tenor issued on May 2.

The latest yield represented a bid price of 98.845 per 100 nominal.

Today the Treasury will invite tenders for 273-day bills maturing on February 20, 2009.

The following week the Treasury will invite tenders for 182-day bills maturing on November 28, 2008.

Treasury bill trading on the Malta Stock Exchange amounted to €2.4 million, while off-Exchange transactions amounted to €683,000. The bulk of the trades were conducted by the CBM in its role as market-maker.