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An AMERICAN bank bought ALBANIAN government debt in lek through 'Raiffeisen Bank'!

2024-09-17 12:25:09Aktualitet SHKRUAR NGA REDAKSIA VOX
An AMERICAN bank bought ALBANIAN government debt in lek through 'Raiffeisen
Edi Rama

State Street is a well-known bank in the United States of America.

In recent months, it has invested about 70 million euros to buy securities of the Albanian government.

Kapitali has learned that American banks have bought about 7 billion ALL of bonds with maturities of 3 and 5 years.

The operation was carried out through the Raiffeisen bank in Albania.

But State Street is not the only foreign bank that is investing in the purchase of the internal debt of the Albanian government.

There are also several other financial institutions from abroad, which during the summer bought about another 3 billion lek worth of securities, bringing the total of purchases to almost 100 million euros.

This is the first time in history that a foreign bank bought the debt of the Albanian government in Lek, through bonds issued by the Ministry of Finance and the Bank of Albania.

Until now, the purchase of internal debt that the Albanian government issues in lek has been the exclusive domain of banks, financial institutions or Albanian citizens.

The entry of foreign banks into this market, in addition to expanding the market by reducing debt interest rates, also expresses the strengthening of confidence in the Albanian economy in the eyes of foreign investors.

trust

Purchases of government debt in lek by foreigners started immediately after the well-known rating agency Standard and Poor's upgraded Albania's sovereign debt rating from B+ to BB- for the first time, emphasizing the improvement of the country's fiscal position and external position.

According to Standards and Poor's, Albania has consistently demonstrated its ability to withstand shocks, including the 2019 earthquake, the COVID-19 pandemic and the macroeconomic spillover effects of the Russia-Ukraine war. Despite these obstacles, the agency estimates that Albania's economy has grown by an average of 5.8% per year over the last three years, simultaneously improving public finance parameters.

Beyond the improvement of the sovereign rating by SP, another factor that seems to have encouraged foreign investments in lek securities is the stability of Albania's national currency.

In recent years, the lek has continuously appreciated, both against the euro and against the US dollar.

As developing countries such as Albania offer higher interest rates, this has increased the appetite of foreign banks to invest their capital in buying Albania's domestic debt.

A source from the Bank of Albania told Kapital that the purchase of domestic debt by foreigners was one of the additional reasons for the increase in pressure for the strengthening of the lek during the summer, which forced the Bank of Albania to intervene by massively buying euros./ Kapital


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