Albania’s central bank has decided to keep its key policy rate unchanged at 1.0% amidst low inflationary pressure, it said.
The interest rate corridor in the interbank money market will also be kept unchanged, set at 0.10% for the overnight deposit rate and 1.90% for the overnight lending rate, Bank of Albania said in a statement following a meeting of its rate-setting supervisory council on Wednesday.
The central bank last changed its monetary policy rate in early June 2018, lowering it by 25 basis points to 1.0% amid strong appreciation of the lek currency which increased downside pressure on inflation.
The analysis of the central bank shows a higher than expected slowdown in economic growth in the first half of 2019, due to supply shocks whose effect is expected to be short-term, Bank of Albania said.
The current monetary policy stance is appropriate for backing economic growth but uncertainties in the internal and external economic environment and the downside risks may cause a further easing in the future, central bank governor Gent Sejko said in the statement.
According to Sejko, Albania’s annual inflation averaged 1.4% in the second quarter, compared with 1.6% in the first three months of the year.
Data from Albania’s statistical office INSTAT shows that Albania’s economy grew by 2.2% in the first quarter of 2019, slowing down from a 3.1% expansion in the fourth quarter of last year.
“On the other hand, the key components of aggregate demand – consumption and private investment – continued to grow,” Sejko said.