Albania's central bank cuts base interest rate to 10-year low of 4.75%.

By bne IntelliNews December 1, 2011
The supervisory board of Albanias central bank decided on November 30, 2011 to cut the base interest rate by 0.25pps to a 10-year low of 4.75%, the bank said on its website. This decision is in line with the banks projections for controlled inflationary pressure in the mid-term period. The ease of the monetary stance aims also to boost economic activity in the country. Although the average annual inflation slightly increased to 3% in October, it still remains within the target of the central bank. Downward inflationary pressure is reflecting the balancing effects between negative output gap of domestic economy and external shocks. Referring to fiscal policy, the central bank encourages further measures aimed at long-term sustainability of the public debt. Fiscal stimulus has already faded out after Q1 2011 in an effort for controlling the level of the debt. The central bank expects only moderate increase in economic activity in the coming months. Slowing growth in Albanias key trade partners will dent demand for Albanian products and the governments fiscal consolidation measures will curb demand from the public sector so investments and private consumption are expected to drive the economic recovery.

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