Debt interests decreased

After making a detailed study in the bonds market, the Competition Authority declared that the Albanian Bank had increased the barriers for the participation in the bond auctions, by limiting the competition. The authority demanded a market liberalization by recommending a series of concrete measures.

But even after the investigation, the bond market kept being solid until the beginning of the last year, when some banks of foreign capital in Albania stopped offering loans to the government. Being in this difficult situation, the government was obliged to open the market for individuals. Initially by opening an auction post and later by increasing the participation of individuals from 20 to 50%.

Last year the Ministry of Finances started for the first time a wide advertisement campaign, measures that the authority had suggested years ago. The results were immediate. The weight of individuals and public debt marked the highest historic growth last year, reaching 20.5% of the total, while that of the banks reduced for the first time.

The opening of the market brought a sudden decrease of the interest rates. The average norm for the three-month bonds fell from 5.81% in 2010 to 5.17%, while that of the one year bonds reduced from 8 to 7%.

The interests kept falling this year, reaching the lowest point of 6.21%. Part of this plunge is related to other factors, such as low inflation or high liquidity. But on most of the cases, what happened with the bonds shows that the citizens pay more for the controlled markets, a phenomenon that is isolated in the Albanian economy, according to the investigations of the Competition Authority.

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