“As market conditions change, we aim to offer the residents a safe and simple short-term investment method. The Rules signed today are an essential step for savings notes to be distributed again in Lithuania. Afterwards – the signature of savings notes placement agreements with domestic banks. We hope that this instrument will be launched in the next few months”, says Minister of Finance G. Skaistė.
The Rules provide that GSN interest rate will be set on the basis of the appropriate term average Government borrowing rate on behalf of the State. The annual GSN interest rate will be fixed 4 working days before the start of placement of savings notes and published on the website of the Ministry of Finance.
The Ministry of Finance constantly monitors the market situation and analyses possible borrowing alternatives and methods: the aim is to harmonise such borrowing conditions that are attractive to residents, do not distort competition in financial markets, do not increase the risk of refinancing, maintain effective pricing as compared to other instruments of borrowing on behalf of the State and allow to expand opportunities for residents to choose where to invest the accumulated funds.
GSNs are the Government securities to be purchased solely by natural persons. GSNs are safe investment generating return, similar to term deposits with banks, only in this case the residents would entrust their savings to the Government. In turn, the savings notes for the Government are a possibility of forming one more borrowing instrument – to borrow from residents directly and thus attract the residents’ savings not invested elsewhere.
