Interest rates on gov’t bonds return to growth trend after four months of decline

The interest rate on 2-year Albanian government bonds rose slightly in the auction in May.

According to the Bank of Albania, coupon bonds rose to 2.45%, from 2.25% that it was in the previous auction.

At the auction held this week, from ALL 5 billion bonds issued by Ministry of Finance, the demand presented in the auction were at the value of ALL 4.86 billion.

Thus, bonds follow the trend of treasury bills, where, after a decline of about three consecutive months, the interest rates are reporting some kind of slight increase.

In the first quarter, a high market demand for instruments of government debt was observed, which reflected a higher amount of free liquidity in the market.

But in mid-April and during May, interest rates rose slightly, indicating that they may be toward stabilization, following two opposite cycles over the course of six months.

For the moment the market has reached a kind of equilibrium.

Returns on investment in instruments of government debt are at proportional levels with the base interest rate and other interest rates in the financial market.

Experts expect that interests will remain low during the year, in pursuit of the facilitating monetary policy.

This means lower returns on investments of savings in financial products, but, on the other hand, low interest rates on bank loans.

SCAN

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