Monday, October 3, 2011

Bank of Albania Cuts Rate 25bps to 5.00%

The Bank of Albania decreased its main monetary policy interest rate by 25 basis points to 5.00% from 5.25% previously.  Bank of Albania Governor, Adrian Fullani, said: "The Supervisory Council decided to decrease the basic interest rate by 0.25 percent, by making its value 5 percent. This serves the achievement of the inflation's objective in middle-term periods and at the same time it offers the necessary monetary conditions to stimulate economic activities in the country. I believe that this measure will be transmitted at the defined level,"

The Bank of Albania previously raised the interest rate by 25 basis points to 5.25% at its March meeting this year, while holding the interest rate unchanged at its June meeting.  Albania reported annual inflation of 3.1% in August, down from 4.2% in May this year, and 4.5% earlier in February this year, but still above the Bank's 3% inflation target.  

The IMF sees Albania's economy growing 2.7% this year, while the government sees 5% GDP growth; Albanian economic growth was 2.3% in 2010.  Albania's currency, the Lek (ALL) has weakened by about 1% against the US dollar this year; the USDALL exchange rate last traded around 105.5


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