T-bill yields embark on upward trend

TIRANA, Nov. 27 – Yields on 12-month T-bills, the key instrument of government’s internal borrowing, registered a slight increase for the sixth auction in a row since September 2014 despite the key interest rate continuing remaining at historic low. Yields on 12-month T-bills in the latest auction in late November 2014 slightly rose to 3.3 percent, up from 3.28 percent in the previous auction and a historic low of 3.18 percent in early September 2014.
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.