T-bills interest rates rose again despite BoA’s decision to continue its easing monetary policy

The growth of the interest rates of government securities has not been curbed despite Governor Gent Sejko’s warnings that the easing monetary policy will continue and possibly it will be deepened.

According to data from the Bank of Albania, 12-month treasury bills were issued on Tuesday with a weighted average interest rate of 2.54%, from 2.45% at the previous auction.

The same was true with 6-month bonds, when interest rate reached 2.04%, from 1.82% at the previous auction.

The market demand for treasury bills was sufficient, with a total of ALL 12.6 billion, out of ALL 11.7 billion requested by the government for funding.

On Monday, the interest rates for 2-year treasury bills rose further to 2.99%.

The primary government securities market is following a gradual growth trajectory of interest, but, however, the curve growth so far appears to be stable and without disturbing shocks.

The invigoration of demand and the soundness of the banking system is improving lending to the economy, shifting more funds into the private sector.

Consequently, investors are seeking a higher return as far as government debt is concerned.

The Albanian government expects an increase in debt interests in the short term, a projection that has been expounded in the draft budget of 2018.

According to the draft, interest rates for domestic debt next year are expected to reach ALL 25 billion, increasing by three billion ALL compared to this year.

SCAN

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