Government securities

Government securities are marketable debt instruments issued and guaranteed by the Government of the Republic of Albania. Government securities are issued in the form of Treasury bills and bonds, in both foreign and domestic currencies.

Treasury bills are short-term financial instruments with 3, 6 and 12 month maturity. The yield of this instrument is calculated as the difference between the nominal value and acquisition price of the coupon.

The Treasury bill of the Albanian government is a marketable debt instrument with a maturity up to one year issued and guaranteed by the Government of the Republic of Albania.

Treasury bills are issued (for sale) by the government through auctions. This form means that the investor must compete to purchase this instrument. For the auction, an interest rate, which is called Treasury bill yield, is set. The Treasury bill yield is the basis for the calculation of the buying price of the Treasury bond.

The yield obtained by the investment in Treasury bills is calculated as the difference between the buying price of the bill and its nominal value. The ratio of this difference with the buying price calculated in annual basis expresses the yield or return on investment. Treasury bills are marketable and may be sold or bought before the maturity date. Treasury bills may be traded up to 1 (one) day before maturity. The trade may be done with entities licensed by the Albanian Financial Supervision Authority (AFSA), which also includes commercial banks. On the maturity date of the Treasury bill, the income tax is applied on the profit made by the investment.

The calendar of auctions of Treasury bill issues is defined by the Government of the Republic of Albania. Normally, auctions for Treasury bills issues with 3 and 6-month maturity are organised once a month, while auctions for Treasury bills issues with 12-month maturity are organised every two weeks. As a rule, auctions are held on a Tuesday, while the issue of the bill is two days later, on Thursday. The auction is announced preliminarily by the Ministry of Finance and the Bank of Albania through their respective websites.

Households may take part in the Treasury bill auction

  • through the desks of the Bank of Albania
  • through entities licensed by the relevant authorities for this services

How do I take part in the auction through the Bank of Albania?

  1. Open an account for participation in the Treasury bill auction in a commercial bank licensed as a  settlement agent
  2. Deposit in this account the funds that you will invest
  3. Go to the desk of the Bank of Albania to open a Treasury bill account and sign the contract with the Bank of Albania. *Present an identification document, along with the IBAN number of the account opened at the commercial bank
  4. Fill out the application for participation in the account

How do I take part in the auction through other licensed entities?

  1. Open an account for participation in the Treasury bill auction at the licensed entity
  2. Deposit in this account the funds that you will invest 
  3. Fill out the application for participation in the account

Bonds are medium-term and long-term financial instruments with 2,3,5,7 and 10 year maturity. The yield in the form of coupon is paid every 6 months during the lifetime of the instrument. Generally, bonds are issued with a fixed coupon, that is, with a fixed interest rate throughout the lifetime of the instrument. But, they may be issued with a variable coupon as well. In this case, the interest rate is variable and is defined every year as the sum of the variable index rate and a fixed margin defined in the auction.

The index rate is calculated before the auction date re-determining the variable bond coupon, as the weighted average of the 12-month Treasury bills of the last three auctions.

In the capacity of the Government’s fiscal agent, the Bank of Albania is responsible for the organisation of the auction, settlement and keeping of the electronic registry of government securities issued in the domestic market.

How can I take part in the auction?

Households may take part in bond auctions only through entities licensed for this service.

What should I do to take part in the auction?

  1. Open an account for participation in the bond auction at the licensed entity
  2. Deposit in this account the funds that you will invest 
  3. Fill out the application for participation in the account

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