The Central Bank official data indicate that the interest rate of the
Treasury Bonds increased by loading a heavier burden to the government’s
cost for paying the budget and its expenses.
In the last auction organized by the Central Bank, the one-year-term interest rates have increased from 7.34% to 7.38% within two weeks. The treasury bonds have also increased for short term agreements. According to the Bank, the interest reached 6.24%, from 6.2% that it was one month ago.
The treasury bonds interests remained in high levels, although the Central Bank has reduced it to the lowest historical level of 4.25%. The interests of the treasury bonds are among the main indicators on which the loan rates are measured, which remain high and without presenting the facilitation effect of the CFentral Bank for reducing the basic interest.
The financial markets in Albania faced an unprecedented phenomenon regarding the withdrawal of some banks for investing in the Treasury bond market, due to the obligations set by the European Banking Authority. Unofficial data from the Ministry of Finances and the Central Bank, say that the loan that the government took in the beginning of the year (140 million EUR) has put the governmnet in a very difficult situation for paying the debt with low rates.
Bonds, a good investment
The difficult situation of our economy has turned the treasury bonds into an attractive investment for the individuals. The profits from investments have increased not only due to the high interests, but also due to the low inflation norm.
The official inflation for May, according to the Institution of statistics, was 1.9%, one of the lowest since 2004. This means that the real interest that an individual profits from a one year term treasury bond investment goes from 5 to 5.5% annually, which is an attractive investment alternative not only for the financial market, but also compared to the other investment possibilities.
The predictions are that the government’s treasury bonds will stay an attractive investment even for the remaining part of the year. The Albanian Bank foresees an inflation norm of 90%, which will keep staying from 0.7 to 2.8% for at least eight months, meaning that the real profit will still remain high.