Slight increase of interest rates for treasury bills – Market still stable

Interests of treasury bills recorded a negligible increase in the auctions on Tuesday, confirming a period of stability.

According to data from the Bank of Albania, 12-month maturity bill were issued at a weighted average interest rate of 2.1%, from 2.06% that it was in last month’s auction.

Even six-month maturity bonds reported a slight increase to 1.65%, from 1.54% that had been in the previous auction.

Market demand for bills was high again, accounting for a total of ALL 15.5 billion versus 13.9 billion announced by the government for funding.

In the last two months, the market of government debt instruments was quite stable, after strong fluctuations of interest rates since the middle of last year.

Current levels appear to guarantee a reasonable return to investors, at a time when interest rates in financial markets are still near the lowest historical values.

Experts expect that the bills interest rates lie low during the year, reflecting an alleviating monetary policy pursued by the Bank of Albania.

Interest rates of bills at these levels do not exert pressure for a significant increase in interest rates of deposits and bank loans.

However, improvements in the cycle of the Albanian economy are expected to result in a gradual increase of interest rates in financial markets, most likely starting from 2018.

SCAN

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