Treasury bonds – Interest drops at 1.12%, the lowest level ever
The decline in treasury bonds interests has touched a new record this week. According to the Bank of Albania, the average weighted interest rate for 12-month bonds fell to 1.12%, the lowest ever recorded. The demand of investors to buy bonds this time was even higher than the ALL 9 billion offered by the Albanian government.
Since last year, the ratio between demand and supply in the government debt securities market has led to a continuing downward trend in interest rates. High liquidity in the financial system caused the demand for bonds and bonds to be high. Meanwhile, the government significantly lowered the offer of these letters to the market, especially after issuing the eurobonds in October. This situation has caused the interests to go down to the lowest level ever recorded.
Lack of financial investment alternatives instead of currency causes most institutional investors to turn to the government bonds. Indeed, in the primary debt market an increasing burden is also catching up on individuals. According to the Ministry of Finance, individuals already hold over 15% of domestic government debt. Lower bond interest rates, as a guideline, affect the maintenance of low interest rates in private sector lending, especially for individuals.