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The Bank of Albania is expected to change the direction of monetary policy from easing to tightening with an increase in the interest rate in order to face the effects that the strong rise in prices can bring to the economy.
This was announced by Governor Gent Sejko in an interview with Top Channel, according to which the institution is carefully monitoring the situation and will react depending on inflation.
“We are monitoring inflation,” he said. the last inflation figure was 3.7%. The BoA is conducting its own analysis to judge the decision-making. We are at the historical minimum interest rate of 0.5% and depending on inflation we will react, we have communicated. We will look at the inflation performance and of course the time has come and obviously from the level of price increase which is a strong challenge for the economies that will impose the changes of the monetary policy. In the coming years we will have a non-easing monetary policy, but it will start to be tight depending on the inflation rate. Until the first half of the year we can have a correction of inflation, but it must be seen because when prices rise it is difficult to fall. Depending on the figures, decisions will be made.
The economy needs stimulus and we will continue to support it. The interest rate this year is sure to start to rise, that when this can happen I can not say without the analysis of figures and the economy. “It is more than certain that the policy of the BoA bank will change direction, from the easing policy it will gradually start raising the interest rate as all the central banks of the world have done”, said Sejko.
Asked about the central bank’s expectations for the performance of the economy, Governor Sejko expressed optimism for its growth to the level of up to 4% this year.
“This year the economic growth can be at the levels of 3.8-4%. We predict that even in the medium term we will continue in an economic growth between 3-4%. This will seem, but the economy has all the opportunities to have a growth, structural reforms must continue, the fight against informality and others and move in the right direction and have a good summer season which is very important for the Albanian economy “, said Gent Sejko, Governor of the Bank of Albania.
According to Governor Sejko, the strong rise in prices and the spread of new variants of Covid 19 are also seen as the main risks to the Albanian economy this year.
top channel
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