On Monday, October 26, the European Central Bank (ECB) announced its weekly main refinancing operation (MRO). This auction, which was conducted on Tuesday, attracted bids for €48.66 billion from euro area eligible counterparties, €1.14 billion less 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.
Also on October 26, the Eurosystem and the Swiss National Bank (SNB) 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 €5.18 billion, and since this was well below the intended amount of €25 billion, all bids were allotted in full at a fixed price of -0.84 swap points.
On Tuesday, October 27, the ECB announced a standard Longer-Term Refinancing Operation (LTRO) with a maturity of 91 days. In this LTRO, the ECB received bids for €3.28 billion, which amount was allotted in full at a fixed rate equivalent to the prevailing main refinancing rate of one per cent.
On Wednesday, October 28, the ECB, in conjunction with the US Federal Reserve, conducted a seven-day US dollar funding operation through collateralised lending. This attracted bids for $23.15 billion, which amount was allotted in full at a fixed rate of 1.12 per cent.
In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day bills maturing on January 29, 2010 and 182-day bills maturing on April 30, 2010. Bids for €29.15 million were submitted for the 91-day bills, with the Treasury accepting €6.10 million, while bids for €27.21 million were submitted for the 182-day bills, with the Treasury accepting €16.61 million.
Since €40.28 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €17.58 million to €582.43 million.
The yield resulting from the 91-day bill auction fell to a new record low of 1.442 per cent, 1.6 basis points below that on bills with a similar tenor issued on October 23. The latest yield on such bills represented a bid price of 99.6368 per 100 nominal. The yield resulting from the 182-day bill auction was 1.613 per cent, i.e. 0.9 basis points lower than that on bills with a similar tenor issued on October 9. The yield on these bills represented a bid price of 99.1911 per 100 nominal.
Today the Treasury will invite tenders for 182-day bills maturing on May 7, 2010.
Treasury bill trading on the Malta Stock Exchange amounted to €3.30 million during the week, with €0.64 million trades being conducted by the Central Bank of Malta in its role as market facilitator and € 2.65 million trades being conducted by other brokers.