Konfindustria denounces lack of competition in T-bill market

TIRANA, Feb. 22 – Albania’s business community represented by Konfindustria has denounced lack of competition in Albania’s T-bill markets after yields registered an unexpected rise in the latest auction despite the key interest being lowered to a record historical rate. In a statement, Konfindustria calls on government to facilitate participation of individuals and businesses in the T-bill market and seriously consider establishing a second-tier bank with public capital to increase competition in the market.
“In the short-term measures, government should target establishing an information system technically facilitating the direct participation of citizens and businesses in the T-bill market without the mediation of the banking system. In the mid-term, government should seriously consider the establishment of second tier bank with public capital to increase fair competition in the market.”
In the latest auction held on Feb. 14, 12-month T-bills yields rose to 7.21 percent up from 7 percent in the previous auction held in Jan. 31 despite Bank of Albania lowering the key interest rate for the national currency, lek, to a historical record low of 4.5 %.
The 7.21 yield is the highest since mid-November 2011 when yields entered a falling trend prompted by the Bank of Albania key interest rate cuts. However, new developments show investors are perceiving an increased risk in 12-month Bills as Albania’s public debt remains in the legal limit of around 60 percent of the GDP and the economy is failing to recover to moderate growth rates.