T-bill yields slightly drop

TIRANA, Feb. 26 – T-bill yields registered another slight decrease in this week’s auction when government sold around 12 billion lek (Euro 84 million) in 12-month and 3-month T-bills. Twelve-month T-bill yields dropped to 3.77 percent in this week’s auction down from 3.8 in the previous auction. Meanwhile, 3-month T-bill yields dropped to 3.3 percent, down from 3.36 percent in the previous auction. Yields on government securities registered a slight increase in early January 2014 despite the key interest rate standing at historic low of 3 percent, unveiling signs of a rising trend in yields as public stands at a staggering 70 percent of the GDP and Standard & Poor’s, one of the top three international agencies, lowered Albania’s long-term sovereign credit ratings to ‘B’ from ‘B+ with a negative outlook.
Yields on 12-month T-bills, which are the key instrument of domestic public debt, dropped to 3.62 percent in December 2013, almost half of the record 6.6 percent in January 2013.
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 as non-performing loans have reached a record 24.4 percent and lending stands at negative growth rates of 2 percent.