ECB Monetary Operations
On Monday, 6 July, the ECB announced its weekly Main Refinancing Operation (MRO). This attracted bids for e106.41 billion from euro area eligible counterparties, which amount was allotted in full at a fixed rate equivalent to the main refinancing rate of 1.00% in accordance with the current ECB policy.
On the same day, the Eurosystem and the Swiss National Bank (SNB) conducted a EUR/CHF foreign exchange swap, with a 7-day maturity, to provide Swiss franc liquidity against euro. This operation attracted bids for e21.58 billion (somewhat below the intended amount of e25 billion) and all bids were allotted in full at a fixed price of -1.09 swap points.
On Tuesday, 7 July, the ECB conducted a Special Term Refinancing Operation (STRO) with a maturity of 35-days. The ECB received bids for e38.28 billion, which amount was allotted in full at a fixed rate equivalent to the ECB’s main refinancing rate of 1.00%.
On the same day, the ECB announced two supplementary Longer-Term Refinancing Operations (LTROs), one with a maturity of 91 days and the other with a maturity of 189 days. These operations received bids for e3 billion and e9.07 billion, respectively, which amounts were allotted in full at a fixed rate equivalent to the ECB’s main refinancing rate of 1.00% in accordance with the current ECB policy.
Also on 7 July, being the end of the reserve deposit maintenance period, the ECB conducted an overnight liquidity-absorbing Fine Tuning Operation. This was carried out at a variable rate, with a maximum rate of 1.00%. This operation received bids for e279.48 billion, with the ECB accepting e275.99 billion, or 98.75% of the total amount bid for. The marginal rate on the operation was set at 0.80%, while the average weighted rate was 0.64%.
On Wednesday, 8 July, the ECB, in conjunction with the US Federal Reserve, conducted a US dollar funding operation with a tenor of 7-days. This attracted bids for $43.08 billion, which amount was allotted in full at a fixed rate of 1.19%.
Domestic Treasury Bill Market
In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day bills maturing on 9 October 2009. Bids for e24.92 million were submitted, with the Treasury allotting e24.38 million. Since e20.38 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by e4 million to e599.20 million.
The yield resulting from the auction was 1.64%, i.e. 1.5 basis points higher than that on bills with a similar tenor issued on 3 July 2009. The latest yield represented a bid price of 99.5872 per 100 nominal.
On Tuesday the Treasury invited tenders for 91-day bills maturing on 16 October 2009.
Treasury bill trading on the Malta Stock Exchange amounted to e3.57 million during the week, with all trades being conducted by the Central Bank of Malta in its role as market maker.