The Albanian government borrowed 1.8 billion lek in the domestic market through the issuance of 20-year bonds. Data from the Bank of Albania show that in the auction held the day before, the interest rate resulted in 6.5 percent, while the Ministry of Finance accepted 22 out of 24 competing requests.
According to the data, the government had planned to borrow 2 billion lek through 20-year bonds. In total, investors offered 2.08 billion through 24 competing requests, but 2 requests were not accepted due to high interest, consequently the Ministry of Finance accepted only 1.8 billion lek.
20-year bonds are the longest-term securities instrument in Albania. Their last auction, before the one the day before, was held in early January, where the government received 1.5 billion lek at an interest rate of 6.72 percent.
This time the interest rate has dropped further to 6.5 percent, although paradoxically the market's hunger for this instrument has not been very great.
20-year bonds are the longest-term debt instruments issued by the Albanian government. They are a good alternative especially for institutional investors and especially for companies that manage funds with a long-term horizon, such as private pension funds.
But individuals can also invest their savings in these instruments, which guarantee higher interest rates, but at the same time require a longer freezing of funds in time.
For comparison, 5- and 3-year bond yields currently fluctuate around 3.8 and 3 percent, respectively, while 1-year bond yields are around 2.5 percent.
Editorial
