How did interest rates change during 2024? From deposits to government securities. Treasury bills and bonds, with decline
Savings have been seen as a form of security for the future, with individuals placing their money in bank deposits, earning minimal but guaranteed interest. This method has long been the choice of the majority. However, with changes in the financial market and the demand for higher returns, some savers have begun to explore other investment options, such as government securities including treasury bills and bonds.
But what are treasury bills and bonds? They are debt instruments issued by the government through the Bank of Albania. Treasury bills are securities with a term of up to one year, while bonds have a maturity of two to ten years or more.
During 2024, government bond yields have fluctuated significantly, influenced by various economic and political factors, such as inflation, the monetary policies of the Bank of Albania, and global financial market trends.
Based on data published by the Bank of Albania, it results that in general, treasury bill and bond rates have followed a downward trend during 2024. Specifically, the treasury bill interest rate increased from 3.48% in January to 3.69% in April, reflecting an increase in financing demand or a tightening of monetary policy. After April, rates followed a downward trajectory, reaching 3.16% in August and then decreasing continuously to 2.72% in December.
On the other hand, 2-year bonds fluctuated between 4.21%-4.29% in the first months, before starting a gradual decline in the second half of the year. 3-year and 5-year bonds also followed a similar trend.
So, Treasury bills have experienced a more steady decline, while long-term bonds have shown more fluctuations, with higher rates towards the middle of the year and lower rates towards its end.
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