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Albanian treasury bond interest rate hits historic low

Xinhua, January 28, 2016 Adjust font size:

The Bank of Albania announced Wednesday that 12-month maturity bonds were issued at a weighted average interest of 2 percent, the lowest ever recorded.

Meanwhile, bonds with a maturity of three months were issued at a weighted average interest of 1.45 percent.

According to banking experts, this is due to liquidity in the financial system, but also to a significant reduction in demand for funding from the Albanian government in recent months.

Up for auction on Tuesday were treasury bills worth 16.7 billion lek (132 million U.S. dollars), of which 14 billion lek were sold, with 12-month and three-month maturities.

Reduced interest rates for the treasury bonds are expected to lead to a decline of interest on deposits and loans. This also applies to existing borrowers who have loan interest in domestic currency built on the interest of bonds and who pay less in periodic revaluations of installments. Endi