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
TIRANA, July 2 – At a time when the need to finance the budget deficit through Treasury Bills and Notes is rising because of underperforming budget revenues, and ahead of migrants’ arrival for their summer holidays, government has launched a publicity campaign inviting citizens to invest in these instruments. The Finance Ministry says it will issue T-bills both in lek and euro. Deputy Finance Minister Nezir Haldeda has unveiled government will sell Euro bonds worth Euro 30 million in two auctions in July and August 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.
“We want to convey this message to all those who want to maximize their benefits from their liquidity in Euro and lek especially during the tourist season when the influx of holidaymakers and migrants significantly increases,” says the Finance Ministry.
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.
Although having lowered the key interest rate by 1 percentage point to a historical record low of 4.25 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.
The Ministry says the campaign is part of public debt management strategy diversifying the debt portfolio, currencies and debt holders.
Data show that Raiffeisen Bank, the country’s biggest commercial bank, is the biggest internal debt holder with around 31.2 percent followed by other commercial banks with 37.8 percent and the central bank with 13.6 percent. Both individuals and non-banking institutions slightly increased their domestic debt shares to 13.3 percent and 4.07 percent respectively in the first quarter of 2012.
At the end of the final quarter of 2011, public debt stock stood at 772.5 billion lek, accounting for 58.76 percent of the GDP, only 1.24 percent below the legal ceiling of 60 percent of the GDP
