Wednesday, April 6, 2016

Albania cuts rate 25 bps as inflation plunges in February

    Albania's central bank lowered its policy rate by 25 basis points to 1.50 percent following the supervisory council's approval of the latest monetary policy report.
    The Bank of Albania, which had maintained its rate since cutting it in November 2015, added that the deposit rate would now be set at 0.25 percent and the overnight lending rate at 2.75 percent.
    The central bank did not immediately issue further information.
    Last year the central bank cut its rate by 50 basis points and said in February that it didn't expect the "intensity" of its monetary stimulus to weaken this year and monetary conditions to remain accommodative over the next two years.
    The central bank expects inflation to return to its 3.0 percent target in the second quarter of 2018 and average around 2.0 percent in 2016.
    In February Albania's inflation rate dropped to 0.2 percent from 1.5 percent in January.
    The International Monetary Fund in February said the central bank's accommodative policy stance was appropriate to counter pressures from disinflation but should "be pursued gradually to avoid risks to financial stability" and strengthening the bank's credibility and safeguarding its independence is critical for fulfilling its mandate.

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