On Monday, March 28, the European Central Bank (ECB) announced its weekly Main Refinancing Operation (MRO). The auction was conducted on Tuesday, March 29, and attracted bids from euro area eligible counterparties of €100.44 billion, €11.02 billion higher 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 current ECB policy.
On Tuesday, March 29, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €76.50 billion. The operation was designed to sterilise the effect of purchases made under the Securities Markets Programme and settled by the previous Friday, March 25. The auction was carried out at a variable rate, with euro area eligible counterparties allowed to place up to two bids at a maximum rate of one per cent. It attracted bids amounting to €77.32 billion, with the ECB allotting €76.50 billion or 98.94 per cent of the total amount bid for. The marginal rate on the auction was set at one per cent, with the weighted average rate at 0.72 per cent. Also on Tuesday, March 29, the ECB announced a three-month Longer-Term Refinancing Operation (LTRO) to be settled as a fixed rate tender procedure with full allotment, with the rate fixed at the average rate of the MROs over the life of the operation. The auction attracted bids of €129.46 billion from euro area eligible counterparties, which amount was allotted in full, in accordance with current ECB policy.
On Wednesday, March 30, the ECB conducted a seven-day US dollar funding operation through collateralised lending in conjunction with the US Federal Reserve. This operation was carried out at a fixed rate of 1.13 per cent and once again no bids were placed by euro area eligible counterparties.
In the domestic primary market for Treasury Bills, the Treasury invited tenders for 91-day bills maturing on July 1, 2011. Bids of €61.78 million were submitted for the 91-day bills, with the Treasury accepting only €5 million. Since €22.95 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €17.95 million, to stand at €398.85 million. The yield from the 91-day bill auction was 1.05 per cent, i.e. five basis points lower than on bills with a similar tenor issued on March 25, 2011, representing a bid price of 99.7353 per 100 nominal.
During the week, Treasury Bill trading on the Malta Stock Exchange amounted to €2.30 million, conducted by the Central Bank of Malta in its role as market-maker.
Today the Treasury will invite tenders for 91-day bills maturing on July 8 and 182-day bills maturing on October 7.