Reallocation of funds decreases deficit

TIRANA. Dec.23- The administration has reallocated $100 million in a move to decrease the national debt. Finance Minister Bode commented that this as an important action that seeks to increase investment. During 2008, the administration plans on borrowing up to $700 million for use in large scale investments. The interest payments on debt will also be high in 2008, around $104 million. The overwhelming part of interest payments will be on internal debt, seen at about 29 billion lek, while foreign debt interest payments are estimated at 4.2 billion lek. The total level of debt is $467 million. External payments for debt in 2008 are estimated at 6.4 billion lek. During the upcoming year, 85.4 billion lek of foreign debt will be used to finance the giant infrastructure highway Durres-Kukes. The market interest rates on debt have been very high, increasing the total cost of debt. Referring to the table of interests of the central bank, the interest rates on T-bills, the classical form of debt are around eight to nine percent. The administration has announced that it will open up the market possibilities in order to involve more actors and more flexible opportunities for borrowing, including commercial banks. The overwhelming portion of internal debt is controlled by banks at the level of 70 percent, while individuals and other groups are at 7.39 percent.