Thursday, September 27, 2012

Albania keeps key interest rate unchanged at 4%

    The central bank of Albania kept its benchmark refinancing rate unchanged at 4.0 percent, saying monetary conditions were appropriate to ensure that it would meet its inflation target and still provide enough stimulus to support domestic demand and growth.
    The Bank of Albania said foreign demand had supported economic growth in the second quarter with increased exports and lower imports and data show that this positive momentum continued in July.
    But domestic demand and economic growth remains below potential, which is reflected in slow growth in production costs and well-anchored inflation expectations.  The central bank expects these factors to continue to determine inflation in the future.
    "Economic activity in the country is expected to remain low... as a result, inflationary pressures remain low and under control," the Bank of Albania said in a statement after a meeting of its Supervisory Council on Sept. 26.
    The bank said inflation in August rose 0.1 percent to an annual rate of 2.8 percent. The central bank targets inflation of 3.0 percent.
    The Bank of Albania has cut its rates three times this year, for a total cut of 75 basis points.


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