Interest rates of treasury bills report slight, but stable increase

Treasury bill interest rates are pursuing a slow but steady growth trend.

According to Bank of Albania data, at the auction of this week, the 12-month maturities were issued at a weighted average interest rate of 2.23%, from 2.16% that had been the interest at the previous auction.

Market demand in the auction appeared limited and the government failed to meet the announced borrowing amount of ALL 8.2 billion.

The value of sold bonds was curtailed to about ALL 8 billion.

The primary debt securities market has been relatively stable in recent months, following strong interest rate fluctuations since the middle of last year.

The market has reached an equilibrium point, which provides a reasonable return for investors, but on the other hand constitutes a favorable borrowing rate for the government as well.

Although the tendency is for a gradual increase, still bills yields do not trigger significant pressures on increasing interest rates on deposits or bank loans.

This sustainability favors the maintenance of low interest rates in the economy.

Experts are not expecting large fluctuations in the bills and bonds market, while prospects for growth in interest rates continue at sluggish rates.

What would accelerate interest growth would be an increase in lending, which would channel more funding into private sector financing.

The data so far show that a large-scale expansion of lending will be difficult, although banks’ expectations for the second half of the year are more optimistic.

SCAN

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