TIRANA, July 17 – The Albanian government intends to sell Euro 11 million in 12-month Euro-denominated T-bills in an auction scheduled for July 25.
The last time the Bank of Albania auctioned Euro-denominated was in late December 2012 when it sold Euro 20 million in T-bills at a 5 percent yield. Bank of Albania data show this is the eight auction in which the Bank of Albania is selling Euro-denominated T-bills on behalf of the Albanian government.
Albania’s T-bill yields continue registering new record lows, positively reflecting the consecutive cuts to the key interest rates but also influenced by rising investments by commercial banks in government securities as lending strives to remain at positive growth rates. In the latest Bank of Albania auction, 12-month T-bill yields dropped to a historic low of 5.35 percent, down from 5.52 percent in the previous auction and 6.35 percent at the beginning of 2013 when the key interest rate was at 4 percent, considerably reducing the cost of Albania’s public debt currently standing at a record 62 percent of the GDP.
Although having lowered the key interest rate by 1.5 percentage point to a historical record low of 3.75 percent since Sept 2011, the Bank of Albania interventions in the monetary policy have been poorly reflected in lowering and T-bill yields and interest rates for loans in the domestic currency lek.
Outgoing government approves wage, pension hike
The outgoing government approved on Wednesday a pension and wage increase despite being told by the new Socialist Party-led government not to take any decisions which affect the country’s already troubled finances. Speaking in a government meeting on Wednesday, outgoing Prime Minister Sali Berisha announced a 4 to 5 percent increase for pensions and monthly wages as a decision which had been envisaged in the state budget approved in December 2012.
The decision increases pensions for 590,000 pensioners and 100,000 public sector wages.
“Every cent will be handled by the state budget. We have not used any debts. The wages fund is 100 percent guaranteed,” assured Berisha.
Reacting to calls by the Socialist Party to act as caretaker government until next September, Prime Mister said he was allowed under Constitution to exert his full duties with no limitations.
Few days ago, government froze spending, cancelled public procurements for investments and reduced allowances to the public administration.
