ardian fullani : overview of albania ’ s recent economic and financial market developments speech by mr ardian fullani, governor of the bank of albania, at the press conference on the monetary policy decision of bank of albania ’ s supervisory council, tirana, 31 july 2013. * * * today, on 31 july 2013, the supervisory council of the bank of albania reviewed and approved the monetary policy statement of the bank of albania on the first half of 2013. based on the latest monetary and economic developments in albania, and following the discussions about their outlook, the bank of albania ’ s supervisory council decided to lower the key interest rate by 0. 25 % percentage points to 3. 50 %. lowering the key interest rate would improve the conditions for a higher aggregate demand, hence helping inflation fall back toward the bank ’ s 3. 0 % target. further easing of monetary policy takes into account expectations for a contractionary fiscal policy over the second half of the year and makes room for a fast and low - cost adjustment of public finances. let me now proceed with an overview of the economic developments and key issues discussed at today ’ s meeting. the first months of 2013 confirmed our assessments of albania ’ s slow economic growth and weak inflationary pressures. albania ’ s economic activity continues to suffer from sluggish aggregate demand reflecting economic agents ’ uncertainties about the future, relatively tight lending standards, and economic weaknesses of our main trading partners. however, amid a challenging macroeconomic environment, albania ’ s economic and financial stability remains stable. in the first half of the year, inflation remained low due to weak demand - side pressures and anchored inflation expectations. the latter reflect bank of albania ’ s prudential monetary policy. this policy has enabled the long - term interest rate cut and has contributed to maintaining the banking system soundness parameters. also, albania ’ s improved external position, together with the national currency ’ s stability and financial sector ’ s overall sound balances, have further strengthened the financial stability and ensured one of the pillars necessary for its long - term development. the second - quarter inflation turned out 2. 2 %, a lower rate than in the first quarter. lower agricultural product inflation and steady prices for other cpi basket items shifted this quarter ’ s inflation down. agricultural price inflation accounted for about 90 % of the headline inflation, reflecting both the price volatility of agricultural products and their relatively high share in the cpi basket. from the macroeconomic perspective, the presence of spare productive capacity continues

have been invited to team up and create open source mobile solutions for sepa instant credit transfers within the next 24 hours. the solutions emerging from both the instant payments challenge and the hackathon lab will be showcased at the conference and will no doubt provide further inspiration for our discussion. and i am pretty sure that our discussion will be a lively one. before we get started, i would like to make some brief general remarks on the european payments market, the eurosystem ’ s market infrastructure as the basis for payments integration and innovation, and our vision for the development of pan - european instant payments solutions. 1 / 3 bis central bankers'speeches the basis for innovation : a sound market infrastructure a domestic european payments market – which is both integrated and innovative – is fundamental to the creation of a more integrated, competitive and innovative europe. and in a world of increasing digitalisation and globalisation, such an integrated and competitive payments market can only be achieved by exploiting the potential offered by ever more sophisticated innovative technology. both established and new market actors should be able to benefit from the innovative space created. the eurosystem has contributed substantially to an integrated european financial market by providing the market infrastructure which enables the safe and efficient flow of payments and financial instruments across europe. but the work is by no means complete. the european financial market faces digitalisation challenges from both the regulatory and the technical side. let me give a few examples. the revised payment services directive ( psd2 ) was put in place to foster innovation and enhance competition in the retail payments market. payment service providers have to accommodate enhanced security requirements and provide account access to third - party payment service providers. on the technical side, the introduction of instant payments means that internal systems and procedures need to be overhauled so that retail payments can move from batch processing into the real - time universe. the eurosystem, too, has been looking for ways to make use of technical progress to improve the efficiency and lower the costs of its market infrastructure services – the target services. just think of the target instant payment settlement service, or tips. tips is a new eurosystem market infrastructure service that was launched in november 2018. it is a truly domestic european market infrastructure settling in central bank money. tips enables banks to provide customers with instant payment solutions that can potentially reach recipients all across europe. another eurosystem market infrastructure initiative is the upcoming introduction of central liquidity management within the new target services, which will make the use of central bank money even