Public debt financing – Q2, banks expanded securities investments by EUR 480 million

Commercial banks have significantly increased investments in securities over the last 12 months. Statistics of the Bank of Albania show that the securities portfolio at the end of June reached the value of about ALL 485 billion, an increase of 33% compared to a year ago. Only in the second quarter of the year, this portfolio increased by about 480 million euros.

The Covid-19 crisis brought a strong increase in the demand for government funding, in order to cover the increased budget deficit, which was caused especially by the drastic decline in revenues. During the second quarter, the government issued the Eurobond of 650 million euros, while increasing the domestic debt stock by about 350 million euros. Banks have taken advantage of this situation by channeling free funds into government debt securities. In addition to remaining the main financiers of domestic debt, it is believed that Albanian banks invested massively in the Eurobond issued in international markets.

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