The Bank of Albania keeps the base interest rate for the lek unchanged

Conditions are not ripe for further easing of monetary policy. The Bank of Albania decided to keep the base interest rate for the lek unchanged at 2.75 percent.

“The Supervisory Council judges that the current monetary policy stance remains appropriate for achieving our price stability objective going forward. The Supervisory Council notes that the overall balance of medium-term pressures is gradually moving towards our inflation objective,” said Gent Sejko, Governor of the Bank of Albania.

While arguing that the Albanian economy will grow, driven by further expansion of consumption and investment, the Governor of the Bank of Albania, Gent Sejko, also indicated where intervention will be made to lower interest rates.

“The outlook for future economic developments remains positive. The Albanian economy is expected to grow at a stable pace in the medium term, while inflation will return to our target of 3% during 2025. In this context, the Supervisory Council assessed that the current stance of monetary policy is still appropriate to guarantee price stability and support sustainable economic development.”

While indicating that the Bank of Albania withdrew 1 billion euros from the foreign exchange market last year to somewhat curb the "euro's rollover", Governor Sejko also explained the strengthening of the lek last week.

"In recent days, the increase in Albanian government spending in the foreign exchange market may have also influenced this. But of course there is a correction. We have constantly emphasized that the exchange rate is a consequence of demand and supply. Without further analysis of the exchange rate, I would say that the Bank of Albania intervenes in the foreign exchange market according to legal and regulatory requirements."

According to the Central Bank's assessments, the main risk facing Albania's economy is geopolitical developments. Governor Sejko argued that uncertainty regarding the trade and economic policies being pursued by the President of the United States of America, Donald Trump, could have significant impacts on the global economy in general and the European economy in particular. (A2 Televizion)