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The strong price crisis has caused the Bank of Albania to increase the basic interest rate again to 1.25%, from 1% which was to maintain their stability in the country.
The governor of the central bank, Gent Sejko, said that the consequences of the war in Ukraine have already materialized with an increase in inflation which, according to him, will peak in the third quarter of the year, slowing down the growth rates of the Albanian economy.
“The Supervisory Council of the Bank of Albania assessed that the high levels of inflationary pressures are the primary risk to the sustainable and long-term growth of the country. For this reason, in compliance with our objective of price stability, the Supervisory Council decided: To increase the basic interest rate by 0.25 percentage points, from the level of 1.0% to the level of 1.25%; to increase the one-day loan interest rate by 0.35 percentage points, from 1.9% to 2.25%; as well as increase the one-day deposit interest rate by 0.15 percentage points, from 0.1% to 0.25%.”
This is the second time the central bank has intervened to mitigate upward price pressures through monetary policy. Inflation, which is currently 6.7%, is expected to return to the central bank’s target in the first half of 2024.
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