Govt seeks Euro 15 mln in 12-month T-bills

TIRANA, Aug. 13 – After last month’s debut auction in Euro-denominated 12-month T-bills, the Albanian government is seeking another Euro 15 million in an auction scheduled for August 23. The auction is part of a campaign targeting migrants spending their holidays in Albania.
Last July, government managed to secure only Euro 11 million in 12-month Euro-denominated T-bills in an auction where it was seeking to sell Euro 15 million. Average T-bill yields registered 5.66 percent, around 2.3 percentage points higher than Euro-denominated deposits.
Lek-denominated T-bill yields registered a slight decrease in the latest auction after the Bank of Albania cut the key interest rate by another 0.25 percent to a historical record low of 4 percent, reflecting the first positive impacts of the monetary policy. 12- month T-bill yields dropped to 7.26 percent, down from 7.34 percent. Three-month T-bill yields averaged 5.23 percent, down only 0.03 percent compared to the previous auction.
Although having lowered the key interest rate by 1.25 percentage point to a historical record low of 4 percent since Sept 2011, the Bank of Albania interventions in the monetary policy have not been reflected at all in lowering T-bill yields. Twelve-month T-bill yields have been on an upward trend since Dec. 2011 climbing from 6.95 percent to 7.38 percent in June 2012.
Investing in T-bills proves more profitable than investing in deposits as 12-month T-bill currently stand at 7.35 percent while interest rate for 12 month lek-denominated deposits are at an average of 5.7 percent. In order to participate in T-bill auctions, individuals must open a bank account with a minimum of 300,000 lek (Euro 2,132) in licensed institutions and order them to make the purchases.
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.