Albanian central bank keeps key rate at 0.5%
TIRANA (Albania), December 23 (SeeNews) – The central bank of Albania has decided to keep its key rate at 0.5% because it considers that the current stance of monetary policy is adequate given the expectations of a higher inflation, said central bank governor Gent Sejko.
The central bank also kept the interest rate on the overnight deposit facility unchanged at 0.1% and the rate on the overnight lending facility at 0.9%, Sejko said in a statement. Wednesday.
Rising global prices for oil, electricity and food have started to trickle down to consumer prices in Albania, Sejko said, adding that the central bank expects the effect to be present by the second half of 2022.
At the same time, economic activity in Albania continues to recover, with gross domestic product (GDP) increasing by 11.7% year-on-year in the first half of 2021.
The central bank governor has indicated that he expects a gradual normalization of monetary policy in the coming quarters as inflation stabilizes.
“The reduction in monetary stimulus ensures that our inflation target is met and lays the groundwork for sustained economic growth in the medium to long term,” Sejko said.
The central bank cut its key rate to a record low of 0.5% from 1.0% in March 2020, with the aim of mitigating the impact of the coronavirus pandemic on the economic and financial health of Albania . The interbank money market interest rate corridor was also revised – to 0.9% from 1.9%.