ECB monetary operations
On November 30, the European Central Bank announced the seven-day Main Refinancing Operation (MRO). The operation was conducted on December 1 and attracted bids from euro area eligible counterparties of €0.26 billion, €0.34 billion less than the bid amount of the previous week. The amount was allotted in full at a fixed rate equivalent to the prevailing MRO rate of zero per cent, in accordance with current ECB policy.
On December 2, the ECB conducted the Pandemic Emergency Longer-term Refinancing Operation (PELTRO) maturing on July 29, 2021, which attracted bids from euro area eligible counterparties of €1.88 billion.
This operation was carried out through a fixed rate tender procedure with full allotment, with an interest rate that is equal to 25 basis points below the average MRO rate over the life of the PELTRO.
Also on December 2, the ECB conducted the seven-day and 84-day US dollar funding operations through collateralised lending in conjunction with the US Federal Reserve. The seven-day USD operation attracted bids of $0.10 billion, which was allotted in full at a fixed rate of 0.33 per cent. The 84-day USD operation attracted bids of $0.01 billion, also allotted in full at a fixed rate of 0.33 per cent.
During the week under review, participants in the TLTRO-II.4 had the option of terminating or reducing their outstanding amount before maturity. Accordingly, on December 16, €5.13 billion will be repaid.
Domestic Treasury bill market
In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day bills and 182-day bills for settlement value December 3, maturing on March 4 and June 3, 2021, respectively. Bids of €110 million were submitted for the 91-day bills, with the Treasury accepting €30 million. Similarly, bids of €110 million were also submitted for the 182-day bills, with the Treasury accepting €11 million. Since €46 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €5 million, standing at €629.50 million.
The yield from the 91-day bill auction was -0.488 per cent, a decrease of 0.6 basis point from bids with a similar tenor issued on November 19, representing a bid price of €100.1235 per €100 nominal. The yield from the 182-day bill auction was -0.489 per cent, a decrease of 1.3 basis points from bids with a similar tenor issued on October 15, representing a bid price of €100.2478 per €100 nominal.
During the week under review, there was no trading on the Malta Stock Exchange.
Yesterday, the Treasury invited tenders for 91-day bills and 273-day bills maturing on March 11 and September 9, 2021, respectively.