economy to equilibrium and of inflation to target, in the medium - term horizon. in our view, the indicators of economic activity and inflation are performing in the right direction ; however, the sustainable accomplishment of targets will need time and will imply keeping low interest rates for some quarters ahead. overall, the main indicators in banking system activity improved. liquidity, profitability and capitalisation indicators are at good levels, while the ratio of non - performing loans has trended down. the bank of albania has continued to work for the regulation and prudent supervision of the banking system, pursuant to the legal obligations, as well as to sustain its steady development. also, we have cooperated with : ( i ) other public agencies, to improve the legal framework, align regulatory practices, and identify measures for withstanding systemic shocks ; ( ii ) international financial institutions, to develop loan restructuring programmes ; and, bis central bankers ’ speeches ( iii ) foreign regulatory institutions and parent banking groups operating in albania, to exchange information. i would like to reiterate that the banking system is solid, liquid and well capitalised for conducting its intermediary function. however, credit growth continues to appear sluggish, due to tight bank lending policies. maintaining and strengthening banking system soundness is to everyone ’ s benefit, as this is the only system that, with its funds, may sustain long - term economic growth. lending is expected to improve slightly during 2015. the bank of albania, however, expects an increasingly active role of the banking system in lending and will also take all the needed measures to encourage it. at the conclusion of discussions, the bank of albania shares the view that economic policies are performing overall in the right direction. in compliance with its legal duties, and pursuant to its institutional commitments in the framework of the arrangement, the bank of albania will continue to work on : • maintaining price stability, in accordance with its 3. 0 % inflation target. the bank of albania will continue to implement its monetary policy in accordance with the targeted inflation regime and free - floating exchange rate regime. the monetary policy will remain on the easing side, aiming at enhancing transparency of communication and its effectiveness. • maintaining adequate foreign currency reserves. • supporting banking system stability, by exercising its duties as the regulator and supervisor of the banking system. special attention, in this regard, will be given to addressing factors determining non - performing loans. for this purpose, the bank of albania will cooperate with the banking industry and other national authorities

view of domestic currency against the main foreign currencies basket, lek has appeared with appreciation tendencies on continual basis during an extensive period, thus acting as a softer against the imported inflation. estimations carried out at the bank of albania reveal that the relative high growth of real gdp during the period 2003 - 2007 is endowed to the rise of work productivity as well as to the increase of investments in the economy. simultaneously, banking system is expanded with detectable and confident steps. the situation appears also pleasurable regarding banking credit to the private sector. business credit has played the main contribution to the enlargement of banking credit portfolio, by 66 %. the augmentation of this portfolio is considered to have impacted positively the growth of economic activity for the main sectors. in september 2008, credit portfolio was dominated from the lending to trade sector ( around 25 % ), to construction ( around 15 % ) and to industry ( over than 15 % ). the credit to small and medium - sized enterprises as at november 2008 resulted at 60 % higher than the year end 2006, based on the calculations of the bank of albania, hence being a ratio over the half of the bank total credit granted to the business. thus, crediting activity of banking system has supported the growth in the main sectors of economy and has assisted to the further deepening of the financial intermediation. this support is identified in the larger geographic expansion of them as well as in the services gamma and the improvement of products supplied by the financial system. the today initiative is a significant event, to sustain the growth of financing for this vital part of the economy and it will help to soften the negative impacts of the world economy slowdown. i encourage the banking system and the other players of the market to undertake similar initiatives in order to not impede the financing of small projects, which owns the possibility to be transformed into profitable enterprises. at the same time to maintain a stable and long - term progress of the country, in line with its european aspirations, the banking system should go on the way toward the perfection of service versus the clients, the intensification of communication and public education. bank of albania believes that the sources of the stable growth for the mid - term and long - term period consist not only on the encouragement of the work productivity increase or of the investments in industry and construction, but also in other strategic sectors. for the albanian economy as a developing economy, domestic investments and foreign direct investments in strategic sectors as tourism and