Albania Secures Loan at Higher Rates

Tirana | 05 March 2009 | The Albanian Ministry of Finance selected two international banks on Thursday from which it will borrow between €250 and 300 million, after its attempt to raise money through issuing bonds failed.

“Deutsche Bank and Alpha Bank offered the best conditions, but none of the participants fulfilled our request,” said the minister of finance Ridvan Bode at a press conference.

After the government was unable to issue bonds, it drew up a new tender asking participants to redesign their offer and adapt it to the current market conditions. The best offer they received only met 65 per cent of the amount requested by the Albanian government.

Bode did not disclose the interest rates of the offer saying that “in this stage, such information is confidential” but admitted that Albania will accept high interest rates during this year and plans to transform the loans in the future into eurobonds.

“We intend to refinance this loan in the next few years, after that the global turmoil calms,” Bode said.

Well informed sources from the Ministry of Finance confirmed to Balkan Insight that “the interest rate will be at 7 per cent”.

The International Monetary Fund, IMF, warned on Wednesday that poor countries like Albania “will have difficulties in refinancing their debt as the result of the global financial crisis”.

According to IMF, the crisis will hit poor countries in several ways; make it more difficult to access credit, result in a harsh drop in foreign trade and lower remittances from abroad. All these problems have hit Albania. Remittances fell in the second half of 2008, banks have invested less in treasury bills and foreign trade slumped 10 per cent in January.

However, the centre-right government of Prime Minister Berisha has denied that the Albanian economy is in crisis. .

(Reporting by Gjergj Erebara) Source: Balkaninsight

Short URL: http://www.albanianeconomy.com/news/?p=1808

Posted by admin on Mar 5 2009. Filed under Banking & Finance, Economy, Top News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry