By Central Bank News
Albania’s central bank kept its benchmark refinancing rate unchanged at 4.0 percent, saying monetary conditions were appropriate to ensure that inflation meets the bank’s medium-term target and provides the necessary stimulus to support domestic demand.
The Bank of Albania, which has cut rates three times this year for a total reduction of 75 basis points, said it expects “to maintain the stimulative nature of monetary policy in the medium term.”
“In the presence of a stable monetary environment, anchored inflation expectations, as well as a moderate influence of foreign prices and the exchange rate, inflation is expected to remain close to the Bank of Albania’s target in the future,” the central bank said in a statement.
Albania’s inflation rate eased to 2.4 percent inflation in October from 2.6 percent in September due to lower food prices, which make up some 70 percent of the inflation measure.
The central bank said it expects inflationary pressures to remain contained due to moderate monetary growth rates, slow economic activity and lower world prices.
“Domestic demand still appears weak, constrained by the lack of fiscal stimulus and the inertia of consumption and private investment,” the central bank said.
Albania’s economy is expected to continue to expand but at a low level and below potential due to poor private consumption and investment.
Albania’s Gross Domestic Product rose by 0.93 percent in the second quarter from the first, for an annual rate of 2.04 percent, up from an annual contraction of 0.2 percent in the first quarter.
Albania’s central bank targets inflation of 3.0 percent, plus/minus 1 percentage point.
