Further decrease in outstanding amount of Treasury bills
ECB Monetary Operations On Friday, December 4, the ECB announced its weekly Main Refinancing Operation (MRO). This auction, which is normally conducted on a Tuesday, was brought forward to Monday because Tuesday was a public holiday in a number of Eurozone countries. The auction attracted bids for €55.78 billion from euro area eligible counterparties.
On Monday, December 7, 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 euro. This operation attracted bids for €2.60 billion, and since this was well below the intended amount of €25 billion, all bids were allotted in full at a fixed price of -0.70 swap points.
Also on Monday, December 7, the ECB conducted a Special Term Refinancing Operation (STRO) with a maturity of 43 days. This attracted bids for €2.66 billion.
On the same day, it being the end of the reserve deposit maintenance period, the ECB conducted an overnight Fine Tuning Operation to absorb excess liquidity from the market. This was carried out at a variable rate, with counterparties able to place bids at a maximum of 1.00 per cent. The operation attracted bids for €130.90 billion, of which the ECB accepted €129.71 billion, or 99.09 per cent of the total amount bid for. The marginal rate on this operation was set at 0.80 per cent, while the average weighted rate was 0.76 per cent.
On Wednesday, December 9, the ECB conducted two supplementary Longer-Term Refinancing Operations (LTROs), one with a maturity of 91 days and the other with a maturity of 182 days. These operations received bids for €2.93 billion and €1.73 billion, respectively.
On the same day, the ECB, in conjunction with the US Federal Reserve, conducted a seven-day US dollar funding operation through collateralised lending. This attracted bids for $9.57 billion, which amount was allotted in full at a fixed rate of 1.13 per cent.
The amounts bid for in all the ECB’s euro refinancing operations were allotted in full at a fixed rate equivalent to the prevailing main refinancing rate of 1.00 per cent, in accordance with the current ECB policy.
Domestic Treasury Bill Market
In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day bills maturing on March 12, 2010. Bids for €82.36 million were submitted, but none were accepted. Since €31.50 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €31.50 million to €474.14 million.
On Tuesday the Treasury invited tenders for 182-day bills maturing on June 18, 2010.
Treasury bill trading on the Malta Stock Exchange amounted to €4.5 million during the week, with all trades being conducted by the Central Bank of Malta in its role as market maker.
