DREAM / The Prime Minister resigns and wakes up under the Parisian bridge!

 Kliko këtu për të tjera
Voxpress:

Why is the Government appealing to citizens to invest in treasury bonds?

2022-11-15 14:15:06Biznes SHKRUAR NGA REDAKSIA VOX

Why is the Government appealing to citizens to invest in treasury bonds?

As one of the few times in history, the Prime Minister of Albania issued a public statement where he appealed to the citizens on how they should orientate their investments. This is not the first time that Albanian citizens are directly asked to invest their money in government bonds.

The first time that a similar appeal was made was in the First World War, when war bonds were issued in Albania by the Austro-Hungarian Empire. The second time was in the early 1920s, when Albania's first domestic loan was issued, aiming to generate income for the state coffers, which were facing serious difficulties.

The third time when a similar appeal was made was during the period of the centralized economy, where 4 loans were issued for the development of the economy and culture, where the government appealed directly to the citizens to invest in them.

After the 1990s, investing in bonds has been a common economic practice with no extraordinary appeal attached to it.

But what could be the reasons for which the prime minister appealed directly to the citizens this time?

The first reason is obviously because government bonds and bonds are currently a good investment alternative, with high profit rates and completely safe.

The second reason is that the continuous increase in interest rates by the Supervisory Council of the Bank of Albania has been reflected in the change in the investment behavior of market actors. If in the first 6 months it was the individuals who were investing in government bonds and the banks stayed away, in the second half of the year the situation has reversed. It is the individuals who are staying away from the headlines and the banks that have significantly increased their investments.

Another strong reason is that the government has a significant shortfall in domestic borrowing this year. At the end of September, net borrowing in the domestic market resulted in about 4 billion ALL, out of the 33 billion planned in total for 2022. The non-fulfillment of the amounts announced for issuance in the first half of the year has led to the posting in the second half of a very relatively high deficit financing.

The fourth reason is related to the situation in international markets. This year, Albania has reduced borrowing in the foreign market by 3.5 billion lek, as a result of debt service in a higher value than disbursements of funds from abroad.

The fifth reason is that under these conditions, the government is forced to adapt to market demands. Although the public debt strategy envisaged debt restructuring in long-term instruments, the real market demand is in fact for short-term instruments, mainly in 3, 6 and 12 month bonds.

Previously, it was planned to close the Bank of Albania counters for individuals on December 31 of this year, but a few weeks ago the decision was repealed, creating again the possibility for individuals to invest./ Taken from scan


Në përputhje me standarded JTI

Video

SHIKO KANALIN NE YOUTUBE
×