Interest rate for 10-year bonds hit 7.2%: BoA
The interest rates of the Albanian government borrowing reported an increase in the first auction after the June 25 general election.
According to data from the Ministry of Finance, 10-year bonds were issued on Friday with a coupon or average interest rate of 7.2%.
The rate has increased compared to the previous auction, while 10-year bonds were issued at 6.45%.
The government had announced to sell ALL2.5 billion of bonds, but demand at the auction participants was less than ALL 1.94 billion.
The relationship between supply and demand explains the increasing coupon at the auction on Friday.
In an environment with very low interest rates, government bonds remain the instrument where investors can secure higher returns.
In overall, during the first half of this year participation in auctions has been high and the market has found a kind of stability, and a similar trend has been observed for treasury bills.
The banking system has a high liquidity and it remains interested in investments in government securities, given the weak performance of lending.
Bank of Albania data showed that lending in May marked a weak performance, with a decline of 1.2% compared with the same period a year ago.
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