The Supervisory Council of the Bank of Albania decided on Tuesday to keep the policy rate unchanged at 2.75%, as well as the overnight deposit and overnight loan rates at the Bank of Albania at 1.75% and 3.75%.

The governor of the Bank of Albania Gent Sejko said that the information analyzed suggests that the Albanian economy has had a positive performance during the past year. “Economic activity, employment, and wages expanded at a steady pace, inflation declined, while economic and financial stability indicators improved. This performance was reflected in the increase in income and consumption of Albanian families, in the preservation of the purchasing power of their income and savings, as well as in the expansion of business investments,” Sejko said in a press release.

“Our monetary policy has had a significant positive contribution to these developments. The prudent and proactive approach to the ongoing challenges we have faced has enabled the control of inflation without damaging the positive trend of economic growth and its financial stability. It has also guaranteed a stable financial environment and a rapid expansion of credit,” the governor said.

According to Sejko, the outlook for economic development in the future remains positive. The Albanian economy is expected to grow at a sustainable pace in the medium term, while inflation will return to our target of 3% during 2025, he noted.

“In this context, the Supervisory Council assessed that the current monetary policy stance is still appropriate to ensure price stability and support sustainable economic development,” Sejko said.

Furthermore, the Supervisory Council also reviewed and decided to approve some amendments to the regulations “On Consumer Credit and Mortgage Credit” and “On Transparency for Banking and Financial Products and Services”.

These amendments take place as BoA’s response to the increased requirements for consumer protection, aiming to further reduce borrowing costs for consumer credit and to enhance transparency for these products, especially for non-banking financial institutions.

More specifically, the amendments to the regulation “On Consumer Credit and Mortgage Credit” include the reduction of costs imposed on consumers in installment consumer credit contracts, primarily for smaller amounts. The amendments review the Bank of Albania’s methodology for calculating the Effective Interest Rate (EIR) for the consumer credit category with installments ranging between ALL 0–200,000, which is expected to result in a lower EIR for this category. Additionally, part of the amendments introduces an obligation for consumers to pay the commissions charged by the entities at the time the consumer credit is granted, rather than having these costs be spread until the full repayment of credit.

On the other hand, the amendments to the regulation “On Transparency for Banking and Financial Products and Services” aim to increase transparency for consumers during the advertising phase of products and services. This will be achieved by standardizing the requirements for the entities subject to the regulation and by differentiating based on the typology of the product or service being advertised.  The amendments specify the elements that advertisements must contain; varying according to the advertised product; the forms of communication with consumers, as well as the measures the Bank of Albania may implement to take down or correct an advertisement in case it identifies any regulatory violations.

The Supervisory Council was also informed on the daily functional and operational activities of the Bank of Albania.