TIRANA, May 18 /ATA/ – With the yields on the treasury bills significantly falling, bank loans denominated in Albanian national currency, Lek, have become cheaper compared to the Euro-denominated loans.
The Bank of Albania said Thursday that long-term bank loans are usually granted at a variable interest rate based on a fixed benchmark.
The interest rate on Lek-denominated loans is normally equal to the yield on the 12-month treasure bulls, whereas the 12-month Euribor rate is applied to the Euro-denominated loans.
According to central bank, the average yield on the 12-month bills sold at the last auction fell to 3.56 %, the lowest rate since last August. In the meantime, the 12-month Euribor rate was 3.81% a day ago.
In the first months of this year, Euribor and yields on 12-month T-bills have pursued opposite trends, with Euribor maintaining an upward trend following the actions by the European Central Bank, which has kept increasing its key rates to 3.75%.
Since beginning of the year, Albania’s central bank increased its key interest rate by 0.25% to 3% in March only.
On the other hand, the high liquidity in the financial market and the large participation of investors in auctions have exerted downward pressure on yield rates on all debt instruments, but especially for 12-month T-bill, causing the yields on 12-month T-bills dropping below the Euribor rate for the first time in May this year.
/r.e/u.sh/
