ardian fullani : overview of economic developments and key issues in albania speech by mr ardian fullani, governor of the bank of albania, on the monetary policy decision by the supervisory council of the bank of albania, tirana, 20 december 2012. * * * today, on 20 december 2012, the bank of albania ’ s supervisory council reviewed and approved the monthly monetary policy report. based on the latest monetary and economic developments in albania, and following the discussions on their future outlook, the bank of albania ’ s supervisory council decided to keep the key interest rate unchanged, at 4. 00 %. the supervisory council deems that the current monetary conditions are adequate to meet bank of albania ’ s inflation target in the medium term. moreover, these conditions ensure the right monetary stimulus to support the domestic demand. let me now proceed with an overview of the economic developments and key issues discussed at today ’ s meeting. * * * annual inflation in november stood at 2. 5 %. the major part of inflation continues to be determined by the performance of food prices. contribution of other goods was steady from the previous month. inflation fluctuation owed mainly to the supply - side factors, of external and internal origin. nonetheless, the intensity of supply shocks was low and lasted for a short period of time. the supervisory council finds that developments in the real economy and financial markets produced low inflationary pressures. the albanian economy continues to remain below its potential. this development is reflected in the low increase of wages and production costs. prices in the global markets and the exchange rate were relatively stable ; hence, they did not exercise pressures for upward prices at home. likewise, expected inflation remains anchored around bank of albania ’ s 3 % target. finally, monetary developments are characterised by low demand for liquid monetary assets. the monetary policy pursued by the bank of albania has contributed to stimulating the aggregate demand, administrating the liquidity in the system, and keeping inflationary expectations in check. this situation of inflationary pressures is expected to remain steady in the medium run. available figures on the economic activity over the second half of the year are partial. indirect data analysis, however, confirm earlier estimates for positive growth during this period, at levels similar to the second quarter of the year. economic growth was mainly driven by foreign demand, while domestic demand was weak. consumer spending is assessed to have been up during the third quarter, reflecting also better activity of the services sector. private consumption, however, remains weak, due

percent changes in issuance volume 2010 - 2011 domestic syndicated loans ( lhs ) international syndicated loans ( rhs ) note : percent changes in aggregated total issuance volume of domestic and international bonds, and domestic and international syndicated loans in each subperiod. the figures are calculated by referencing abraham, f., j. j. cortina, and s. l. schmukler ( 2019 ), " the rise of domestic capital markets for corporate financing : lessons from east asia, " world bank group policy research working paper, no. 8844. the top and bottom 10 percentile of the sample has been excluded in the aggregation of data for each sub - period. source : dealogic. chart 4 interest rate benchmark reform • raising awareness is the key to success. • in japan, the cross - industry committee on japanese yen interest rate benchmarks held the interest rate benchmark reform forum on august 1, 2019. http : / / www. boj. or. jp / en / announcements / release _ 2019 / rel190830f. htm / participated widely by : - financial institutions - non - financial corporates ( e. g., toyota ) - institutional investors ( e. g., insurance companies ) - relevant industrial groups photo : shoichi nose