Rising government need to finance the budget deficit is making investment in T-bills more profitable than deposits
TIRANA, June 20 – Treasury bill yields rose for the second auction in a row as the government’s need to finance the soaring budget deficit increases. Latest Bank of Albania data show T-bills with a 12-month maturity were auctioned at 7.56 percent, up from 7.4 percent in the previous auction while interest rates for six-month T-bills slightly dropped to 6.8 percent, down from 6.82.
Albania’s central bank auctioned 14.4 bn Leks (US$144mln/ 101 mln Euro) in six-month and one-year T-bills on June 16.
Rising government need to finance the budget deficit is making investment in T-bills more profitable than deposits. A recent report published by the Bank of Albania shows interest rates for 12-month deposits dropped by 0.08 percent to 5.8 percent in March 2011.
The Bank of Albania organizes 3-month and 6-month T-bill auctions every month and 12-Month T-Bill auctions every two weeks. T-bills are issued and guaranteed by the Ministry of Finance on behalf of the Albanian government. T-bills are traded in the primary and secondary market. The minimum amount to participate in the primary T-bills market is 300,000 lek (3,000 U.S. dollars).
