costs. however, the albanian economy has been and remains an economy with a relatively high level of informality. this phenomenon has its consequences in many economic indicators of the country, including - potentially - the exchange rate. the bank of albania has continuously taken measures to reduce informality, through the continuous improvement of the payment system, the introduction of regulatory requirements that enable the granting of loans only against certified fiscal balances of businesses, as well as through the implementation of all necessary supervisory regulatory changes, which fall in our field of competence, within the plan of measures for the prevention of money laundering and terrorism combating. however, fully addressing this problem requires further attention. among other things, it should be addressed both through strengthening and coordinating the work of all law enforcement agencies, as well as through further structural reforms in support of the economy formalization. second, the pass through of monetary policy decisions to financial markets was satisfactory. the increase in policy rate engendered an overall rise in interest rates, though the overall financing condition in albania still remain simulating. credit portfolio to the private sector, in response to them and banks'positive approach towards lending, recorded a fast and stable growth over 2023, around 10 %. lending growth also had some positive features : the new credit had a broad sectoral base ; it was focused on our domestic currency ; it had an upward orientation towards investment financing ; and did not harm the overall quality of the portfolio. these features suggest a sustainable and sound credit growth in the future as well. third, the normalisation of monetary policy stance enabled the reduction of inflation, without jeopardising the positive economic growth trend. the positive contribution of the monetary policy was materialised through three channels. first, there was willpower exhibited and concrete measures undertaken to meet the price stability objective, which helped to anchor inflationary expectations and mitigate economic agents'uncertainties. second, the prudential increase of financing costs led to a more balanced performance of demand and supply in the economy, enabling the curbing of the domestic inflationary pressures. third, the normalisation of the monetary policy stance helped financial markets to operate smoothly, keeping down their risk premia. inflation and expectations on inflation, as a result of this reaction, stay already close to our 3 % target, while second - round effects remain under control and the outlook for the future is positive. however, domestic inflationary pressures still appear relatively high, while uncertainties about the future are heightened. 5 / 9 bis

to maintain price stability in the medium term, and liquidity decisions taken in the course of implementing this stance. this distinction serves to isolate signals of the monetary policy stance from the impact on very short - term interest rates of the noise introduced by liquidity movements. at times of market stress, underlining this distinction is even more important than in “ normal times ”. in circumstances of market stress, liquidity management may need to be more active in order to contribute to the smooth functioning of the money market and to ensure that very short - term money market rates remain close to the minimum bid rate of the eurosystem ’ s main refinancing operations. throughout the period of financial market turmoil, and since the very first hours of the start of the money market turbulences, the ecb has promptly communicated to the market its liquidity policy intentions and explained its actions. it was evident from the start that credit institutions requirement to fulfil their reserve requirement on average throughout the maintenance period, the so - called averaging provision, was now used with a preference to do so early within the period. liquidity on different days of a reserve maintenance period was no longer substitutable, and short - term interest rates tended rather to behave as if each individual bank perceived its distribution of liquidity shocks as strongly biased to the tight side, even if this was of course not the case at an aggregate level. the first response of the eurosystem during the turmoil was to try to keep very short - term money market rates near policy rates through more active liquidity management. with this objective in mind, the ecb adjusted the distribution of liquidity supply over the course of a maintenance period, by increasing the supply at the beginning of the period and reducing it later in the period ( the so - called frontloading ). the average supply of liquidity remained unchanged over the whole reserve maintenance period, in line with the eurosystem ’ s aim to provide to the banking system over each maintenance period the exact amount of total liquidity it needs to fulfil its liquidity deficit. the average size of the eurosystem ’ s refinancing operations for the maintenance periods since august 2007 remained at around €450 billion, as in the first semester of 2007. second, since the 9th of august 2007, the eurosystem has made more frequent use of finetuning operations than in “ normal times ”, both in order to inject further liquidity early in the maintenance period