Albanian central bank keeps interest rate flat at record-low of 3.50%.

By bne IntelliNews August 29, 2013

The supervisory board of Albania’s central bank decided on August 28 to keep the base interest rate at the historic low of 3.50% after cutting it by 25bps in July, the bank said in a statement on its website. The decision is expected to create better conditions for the central bank to meet its mid-term inflation target, the statement reads.

The rate setters consider that the economic growth continues to develop below its potential, while the outlook remains weak. The future performance of the economy will be determined by low private consumption and investment activity, which results from reluctance of households and businesses to undertake long-term commitments. In addition, both domestic and external funding conditions, continue to be relatively tight.

Referring to fiscal policy, the central bank said that it has been expansionary in January to July 2013. Budget expenditure increased by 10.4% y/y in the period, mainly due to rising capital spending. At the same time, budget revenues declined by 2.6% y/y. The central bank noted that the government needs to maintain prudent fiscal policy by end-2013 in order to meet the deficit target.

Related Articles

Freedom House keeps “partly free” status for Macedonia despite new government’s efforts

Macedonia was rated only “partly free” in the latest report from international watchdog Freedom House, the same almost all of the six Western Balkan countries, despite efforts by the ... more

Albania’s central bank to issue new high-denomination banknote

The Albania’s central bank has announced it will issue a new ALL10,000 (€74.9) banknote. The new ALL10,000 banknote will have the highest value issued so far, as the current biggest value ... more

Citizens to get "same information as MPs" as Albania launches new e-governance app

Albanian Prime Minister Edi Rama presented a new online platform for co-governance with citizens entitled “Albania We Want” on October 28. Ensuring functional and responsible ... more