Increase in outstanding amount of Treasury bills

On Monday, February 9, the ECB announced its weekly Main Refinancing Operation (MRO). This attracted bids for €197.73 billion from euro area eligible counterparties, which amount was allotted in full at a fixed rate equivalent to the prevailing main refinancing rate of two per cent.

On the same day, 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 received bids for €25.49 billion. As the volume of bids exceeded the intended volume of €25 billion, participating counterparties received 98.08 per cent of the amounts bid for. This operation was conducted at a fixed price of 4.71 swap points.

On Tuesday, February 10, the ECB conducted a Special Term Refinancing Operation (STRO) with a maturity of 28 days. The ECB received bids for €104.73 billion, which amount was fully allotted at a fixed rate equivalent to the ECB's main refinancing rate of two per cent.

On the same day, the ECB announced two Longer-Term Refinancing Operations (LTROs), one with a maturity of 91 days and the other with a maturity of 182 days. These operations received respective bids of €18.48 billion and €10.72 billion.

All amounts were again fully allotted. Both LTROs were conducted at a fixed rate equivalent to the ECB's main refinancing rate of two per cent.

Being the end of the reserve deposit maintenance period, on the same day, the ECB also conducted an overnight liquidity-absorbing fine-tuning operation. This was carried out at a variable rate with a maximum rate of two per cent. This operation received bids for €130.44 billion, with the ECB accepting €129.14 billion, or 99 per cent of the total amount bid for. The marginal rate on this operation was set at 1.80 per cent.

On Wednesday, February 11, the ECB, in conjunction with the US Federal Reserve, conducted a seven-day US dollar funding operation through collateralised lending. This attracted bids for $70.01 billion, which amount was allotted in full at a fixed rate of 1.25 per cent.

In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day bills maturing on May 15. Bids for €28.63 million were submitted, with the Treasury accepting €21.31 million. Since €6.60 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €14.71 million to €453.83 million.

The yield resulting from the auction was 2.313 per cent, i.e. 9.2 basis points less than that on bills with a similar tenor issued on February 6. The latest yield represented a bid price of 99.4187 per 100 nominal.

Today the Treasury will invite tenders for 91-day bills maturing on May 22.

Treasury bill trading on the Malta Stock Exchange amounted to €2.67 million during the week, with €2.67 million trades being conducted by the Central Bank of Malta in its role as market maker and €0.01 million trades being conducted by other brokers. Off-exchange transactions amounted to €0.51 million, all conducted by the Central Bank of Malta.