Eurosystem Monetary
Operations
On Monday, 18 February, the European Central Bank (ECB) announced the weekly Main Refinancing Operation (MRO) through which the Eurosystem injects liquidity with a standard maturity of seven days into the euro area money market. This operation attracted bids for e226.6 billion from euro area eligible counterparties, with the ECB allotting e178 billion, or 78.55 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 4.10 per cent, unchanged from that of the previous week.
On Tuesday, 19 February, the ECB also announced the renewal of one of the two supplementary Long Term Refinancing Operations (LTRO) which had been allotted, respectively, on 23 November and 12 December 2007. These operations were aimed at further consolidating the progress made so far in the normalisation of the euro money markets. Last week’s operation attracted bids for e110.4 billion, with the ECB allotting e60 billion, or 54.54 per cent of the total amount bid for. The marginal rate was set at 4.15 per cent, 6 basis points lower than the last LTRO, announced on 29 January 2008.
Domestic Treasury
Bill Market
In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day bills maturing on 23 May 2008. Bids for e37.7 million worth of bills were submitted, and out of these the Treasury accepted bids for e25.7 million. As e15.3 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by e10.4 million to e325.7 million.
The yield resulting from the auction was 4.131 per cent, 2.1 basis points higher than that on bills with a similar tenor issued on 15 February 2008 and representing a bid price of 98.9666 per 100 nominal.
On Tuesday the Treasury invited tenders for 182-day bills maturing on 29 August 2008.
Treasury bill trading on the Malta Stock Exchange during the week amounted to e3.03 million, with all trades being conducted by the Bank in its role as market maker. No transactions were conducted off-Exchange.