Another historic minimum of interest bonds, Bank of Albania: They will keep dropping

Treasury Bond interests reached another historic minimum while banks, other financial institutions and individuals seem ready to give loans to the government even against minimal profits. 

A recent auction held by the Bank of Albania reduced the interest rate of one-year-term bonds at 3.39%. That of three-month bonds for the first time was reduced at 2.9%, a new historic minimum.

Bank of Albania experts say that the new wave of dropped interest bonds is caused by two factors. According to them, the market is transmitting the eased out monetary policy. The second cause is that the government stopped looking for loans in the internal market and started taking from abroad.

The prediction in the recent report of monetary policy of the Bank of Albania is that the Treasury Bonds interest rate will keep falling in the months to come.

According to her, the low government demand for an internal loans and the excessive liquidity of bank, a situation that hits those who save money.

According to the Bank of Albania, savings by the end of 2013 were 5.1 billion ALL lower than in 2013.

The dramatic reduction of interests in the entire financial instruments is result of an aggressive policy of the Bank of Albania, which wants to discourage savings and encourage consumption or investments in the economy.