In a surprise move, BoA’s Sejko warns that monetary stimulus may increase
At a time when the world economy faces the dilemmas over the so-called “monetary normalization”, which means the gradual increase of interest rates, the Bank of Albania for the first time has publicly stated that it may delay this process.
Governor Gent Sejko said on Tuesday that the Bank of Albania is ready to even increase the monetary stimulus if this is necessary.
Inflation in the last two months has declined as a result of temporary supply shocks, shaking the expectations of the Central Bank over the return of price increases to the target.
In his analysis of the performance of the Albanian economy, the Governor did not fail to mention the contribution of public spending to the economic growth of the first semester.
Although the budget remains at a slight surplus, spending has increased significantly in the pre-election period, supporting investment and consumption.
A positive contribution to the economy has the increase in foreign demand, which is reflected in increased exports and inbound tourism.
The Bank of Albania reiterated an increasing optimism regarding the situation of the banking system. Non-performing loans registered again a slight fall in August, down to 15.1%.
The decline in non-performing loans and the decline in perceived risk in the real economy, according to the Governor, will improve the loan offer in the future.
The Bank of Albania kept the key interest rate unchanged at the historical minimum of 1.25%.
The Supervisory Council stated that the monetary policy stimulus will continue at least until the middle of next year, even in response to the lek’s appreciation in the exchange rate, which weakens inflationary pressures in the economy.
SCAN
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