Debt grows more expensive

The Ministry of Finances updated its internet page by emphasizing even more the opportunities for investing in debts, by reserving a homepage space for the auction announcements.

Shqip newspaper reports that the one year term bonds were sold with 7.32%, or 11 more expensive than in the previous auction held on 14 February 2012.

This is the third consequent auction that causes an increase of the treasury bonds, although the Bank of Albania has reduced the basic interest rate.

The three months term bonds increased to 5.27%, from 5.08% that it was in the previous auction on January.

The Albanian government has a 440 billion ALL interior debt and pays 35 billion ALL of annual interests. A light increase in the debt interests is equal to millions of Euros in extra expenses.

The government’s difficulties in the interior debt market are mostly related with the bank’s desire to decrease the public debt titles, rather than the government’s high demand for debt.

The Ministry of finances threatened to start massive advertising to the public for encouraging Treasury bond purchases directly by the citizens, but so far they have taken small and non sensational steps, mainly through the auction announcements.

Bank of Albania keeps the interest rate to 4.5%, the lowest in the history of Albania. The different between the basic interest and the one year term Treasury bond interest has significantly increased.

During December, the one year term bonds cost 2.1% more in average than the basic interest, but this difference grew with 2.4% in January and in February it went to 2.69%.

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