operated smoothly and the exchange rate has continued to depreciate at low annual paces. the bank of albania has supplied the interbank market with the necessary liquidity for their normal functioning. to sum up, the bank of albania judges that the relatively high inflationary pressures over the first quarter of the year generally resemble transitory shocks. other factors affecting inflation, such as current and expected economic performance against the potential rate of development, expansion of monetary assets in the economy, and the public ’ s expectations of financial markets, exert inflation - restraining impact. our projections for the rest of the year support the maintaining of positive performance of albanian economy. consumption and private investments are expected to grow further, whereas following the 2010 slowdown the fiscal sector is expected to provide a positive contribution to economic growth. however, the demand growth is likely to be below our economy ’ s potential even for 2011. this will condition the downward inflation pressures from the domestic economy, which are expected to offset the foreign price rise effect. on the other hand, the bank of albania is determined to take appropriate measures to meet its inflation target in the medium term. * * * the supervisory council judges that, based on the above overview, medium - term inflationary pressures are in check. inflation expectations remain anchored at the bank of albania ’ s inflation target. in the absence of any unexpected shocks, inflation is expected to be within the bank of albania ’ s target over the medium term. also, the risks around this central scenario appear to be balanced. bis central bankers ’ speeches at the end of the discussions, the supervisory council concluded that monetary conditions appear suitable for meeting the inflation target in the medium term and decided to maintain the interest rate unchanged, at 5. 25 %. bis central bankers ’ speeches

across all its dimensions and structural reforms that broaden development horizons and approximate labour productivity to that of advanced economies, should be further improved through our common endeavours. i would like to emphasise that this landscape describes the expected direction of the country ’ s development in the next two - three year period. in the meantime, under the current situation, the bank of albania is following developments attentively and is assessing the effects arising from the components of this scenario : lending highlights in albania. at present, lending suffers from both the weak and low - quality demand and the conservative lending policy applied by banks. in our judgment, lending will grow at modest rates in 2015. concerning the above, i would like to share the two considerations with you as follows. first, a part of the banking system ’ s conservative approach arises from developments in the european financial market and, eliminating it, will take its time. however, another part of this conservative approach arises from the real or perceived risk of lending, at home. the bank of albania alone may not offer solutions to all the issues that hinder lending. for that reason, we deem that the systematic reduction of credit risk should be treated as an issue of national bis central bankers ’ speeches interest, which should become the scope of coordinated work between public authorities in albania. second, the european experience, along with our experience, has shown that the country ’ s economic growth is not conditioned by the performance of lending in short - term horizons. however, in longer - term horizons, the sustainability of economic growth will undoubtedly depend on the performance of lending. for this reason, we should primarily focus on maintaining and strengthening the soundness of our banking system, for it to be able to respond to future needs of the economy for financing. the bank of albania is undertaking a comprehensive review of lending - related problems. issues that, in our opinion, are yet to be solved and require cooperation from all policymakers include the treatment of non - performing loans and conceptualisation of stimulating factors in banks for healthy lending. the bank of albania will organise two work platforms for each of them, trying to draw in the cooperation of all stakeholders and interested parties. structural developments in parent bank groups. as i mentioned earlier, these arise from both new regulatory requirements of the single supervisory mechanism at european level, an economic / financial developments in the countries where parent bank groups operate. requirements for more qualitative and higher capital levels, which underlie the new european directives on banking activity,