The Supervisory Council of the Bank of Albania approved the Interim Report of the Monetary Policy on Wednesday.

After discussing the country's economic and monetary developments and expected progress, the Supervisory Council of the Bank of Albania decided to keep the basic interest rate unchanged at 2.75%.

It was also decided to keep the one-day deposit interest rate unchanged at 1.75% and the one-day loan interest rate unchanged at 3.75%.

During his speech, the Governor of Albania, Gent Sejko, said that the economy had a positive performance in the second half of the year.

"Economic activity has continued to grow, inflation remains low and under control, financial markets appear relatively calm, while credit growth rates are high. The Supervisory Council reconfirmed that the Bank of Albania's monetary policy has had an important role in this development, through the control and reduction of inflation, without harming the positive trend of economic growth and indicators of the country's financial health,” said Sejko.

The governor emphasized that consumer price inflation recorded an average level of 2% during the months of October and November, this level being the same as that of the third quarter.

According to him, "the stability of total inflation reflected the increase in inflation of food items and the reduction of inflation of rent, oil and long-term consumption items. Inflation of other basket items did not have significant changes".

Sejko added that the Albanian economy continued to grow in the second half of the year, with rates similar to those of the first half, influenced by the expansion of consumption, investment, and export of services, and reflected in the expansion of activity in services and industry sector.

"The expansion of the demand for goods and services has continued to be reflected in the increase in wages and employment. According to INSTAT data, average salaries in the private sector increased by 5.4% during the third quarter, marking a slight slowdown compared to the previous quarter. This slowdown shows an easing of pressures in the labor market and is a premise for a more stable price and inflation trend in the future", said the Governor.

The financial market declared Sejko, has reflected the signals of the monetary policy, showing low risk premiums and favorable interest rates.

Regarding the foreign exchange market, the Governor pointed out that it has continued to be characterized by appreciative pressures of the Lek against other currencies.

"The analysis of the balance of payments data of the third quarter confirms that these pressures continue to be fueled by the increase in foreign currency inflows from tourism, remittances, as well as foreign direct investments. However, compared to last year, the rate of exchange rate appreciation has moderated, thanks, among other things, to the increased interventions of the Bank of Albania for currency purchases," he declared.

“Our expectations for the future have not changed significantly from the previous report. In the baseline scenario, we expect a further, stable, and continuous increase in economic activity, accompanied by an increase in employment and wages. The rate of economic growth is expected to fluctuate near the potential in the medium-term horizon, enabling a full utilization of productive capacities and sustainable economic development. In parallel, inflation is expected to gradually increase towards the target during the next year,” noted Sejko.