Bonds dominate domestic debt - 78% of the stock is held in long-term instruments. Banks remain the main investors
12-month treasury bills and 5-year bonds continue to be the most preferred government securities for investment. Domestic debt consists of short-term and long-term instruments. Long-term instruments, which include all types of bonds, specifically 7 bonds ranging in maturity from 2 years to 20 years, constitute 78% of domestic debt.
Meanwhile, data from the Ministry of Finance shows that short-term instruments, which include 3 types of bonds, ranging in maturity from 3 months to 12 months, account for almost 22% of domestic debt.
Since 2024, all domestic debt has been denominated in lek. But who were the main debt holders in the first quarter of the year?
More than half of the debt issued in the domestic market is held by the banking system, about 64.6%, of which 7.6% by bank clients. Financial institutions own 15.5% of the debt, followed by individuals with 9.1% and the Bank of Albania with 7.4%. Non-residents also have a small share in Albania's domestic debt.
The process of selling these instruments takes place in what is called the primary market, the moment when the government sells the securities for the first time and receives money directly from investors. This market is mainly attended by commercial banks, financial institutions and, in some cases, other institutional investors.
Once these securities have been purchased in the primary market, they can be further traded in the secondary market. This is the market where previously issued debt securities can be bought and sold between banks, financial institutions, or other investors, without the government being directly involved in the transaction.
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