T-bill yields continue rising

TIRANA, Dec. 17 – Yields on 12-month T-bills registered a surprise increase in this week’s auction after the key interest rate was cut to a new historic low of 2.25 percent late last November. Yields on 12-month T-bills in the latest Bank of Albania auction slightly rose to 3.36 percent, up from 3.3 percent in the previous auction and a historic low of 3.18 percent in early September 2014, continuing their upward trend.
Yields on 12-month T-bills have more than halved during the past one and a half years, dropping from 6.6 percent in early 2013 to 3.83 percent in January 2014 and 3.24 percent in the latest auction.
Experts explain the declining trend in T-bill yields with more active participation by commercial banks which have turned to investments in government securities due to poor demand for new loans and tight lending standards as non-performing loans have reached a record 24 percent.
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.