The Governing Council of the European Central Bank (ECB) has today decided to continue conducting its main refinancing operations (MROs) as fixed rate tender procedures with full allotment for as long as is needed - and at least until the third maintenance period of 2010 ends on 13 April. This tender procedure will also continue to be used in the special-term refinancing operations with a maturity of one maintenance period, which will continue for at least the first three maintenance periods of 2010.
The Governing Council has also decided that the rate in the last 12-month longer-term refinancing operation, to be allotted on 16 December 2009, will be fixed at the average minimum bid rate of the MROs over the life of this operation (1).
As regards longer-term refinancing operations in the first quarter of 2010, the Governing Council has decided to carry out the last six-month longer-term refinancing operation on 31 March 2010. This operation will be carried out using a full allotment fixed rate tender procedure, as will the regular monthly three-month longer-term refinancing operations already announced for the first quarter of 2010 (see the ECB’s press release of 29 May 2009).
Looking beyond the first quarter of 2010, the Governing Council will take into account the need to smooth out the liquidity effect of the 12-month longer-term refinancing operations maturing during the second half of 2010.
(1) Only one interest payment will be made - on the maturity date (i.e. 23 December 2010). This interest payment will be calculated as the allotted amount multiplied by
Here, R0MBR is the minimum bid rate of the MRO settled on 16 December 2009, while RtMBR, t=1,…,53 are the minimum bid rates of the 53 subsequent MROs. The operation will have a maturity of 371 days.
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