High demand lowers interest rate of Albania’s treasury bonds to 2.81%
The interest rate for Albanian treasury bonds dropped for the third consecutive auction as a result of a significant increase in the demand of the financial market to invest in these bonds.
The decline confirmed a significant shift in the trend of interest rates since the beginning of 2017.
According to data from the Bank of Albania, 12-month maturity bonds were issued in this week’s auction at an average interest rate of 2.81%, down from a level of 3.05% of the previous auction.
Following a significant increase in the last quarter of 2016, the interest rates are moving towards a stabilized position.
Investors are orienting more funds towards this market, which indicates a greater amount of free liquidity in the Albanian financial system.
While there were 9.7 billion ALL of bonds offered at auctions by the Ministry of Finance, the total demand amounted to 15.4 billion ALL.
The curbing of the growth of interest rates was something expected, as a result of the correction of last year’s interest rates which were at very low levels.
Experts, however, do not expect another decline comparable to the period when the interests of short-term bonds dropped below the base interest rate.
Stabilization of bonds interest rates is expected to result in low interest rates even for bank deposits and loans.
Ersuin Shehu / SCAN
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