Albanian central bank cuts key rate to record-low of 3%.

By bne IntelliNews December 17, 2013

The supervisory board of Albania’s central bank decided on December 16 to cut the base interest rate by 0.25pps to a new historic low of 3% after a similar cut in November, the bank said in a statement on its website. The monetary easing reflects the bank’s expectations for weak inflationary pressures in the mid-term period.

Aggregate demand and economic growth is projected to remain below potential, followed by a slow increase of production costs and consumer prices. Similarly, inflationary pressures from the foreign market is expected to be low and falling.

The central bank’s decision creates more favourable conditions for meeting the inflation target in the medium term, the bank said. The central bankers consider that the negative output gap continues to determine the low inflation environment. In the absence of unforeseen shocks, inflation is forecast to fluctuate at low levels during the next quarter.

The bank confirmed its previous projections for weak economic growth in H2 2013. However, the growth is seen lower than previously expected, mainly due to waning external demand. At the same time, consumption and private investment remain weak, reflecting uncertainties about the future, not the full utilisation of capacity, low consumer confidence as well as financial constrains.

Related Articles

Albanian oil firm Gulf reportedly under investigation for money laundering

Officials from oil distribution company Gulf Albania are under investigation for money laundering, media in Tirana reported on April 22. The owner of the group is Alexandre Gogokhia, a ... more

Albania wants to attract more US defence sector investments

Albanian Defense Minister Olta Xhacka said that Tirana wants more investments by the US military industry in Albania, after a US company launched work on the installation of the Integrated ... more

Bulgaria’s Borissov appeals to Western Balkan leaders to preserve peace

Boyko Borissov, prime minister of the current EU Council chair Bulgaria, called on April 10 on the leaders of the Western Balkan countries to preserve peace and ... more

Dismiss