exchange rate being higher than is currently the case. the bank does intervene in the foreign exchange market from time - to - time. but evidence from the past, here and elsewhere, suggests foreign currency intervention is unlikely to have a sustained impact in lowering the exchange rate. 7 this is because daily foreign currency transactions in new zealand dollars swamp any practical intervention capacity, averaging around $ 100 billion per day with more than 80 percent of the transactions taking place offshore. at best the reserve bank can attempt to smooth the peaks and troughs of the exchange rate. of course, reasonable people can differ on what is the appropriate scale of intervention used to smooth some of the volatility. but the old economic saying that there is no free lunch still applies : the greater the scale of intervention, the greater the financial risk carried by the tax payer. more active macro - prudential policy has been undertaken recently to help reduce the buildup in systemic risk in the banking sector resulting from imbalances in the housing sector. the current low interest rates, although appropriate for the current inflationary environment, are contributing to those financial stability risks. in such circumstances one might consider using monetary policy more aggressively to lean against house prices. 8 while this would mean inflation would take longer to rise to the mid - point of the target band it would reduce the risk of a future crash in the housing market. however, using monetary policy to reduce the financial stability risks of a booming housing market would put additional upward pressure on the exchange rate. instead, we have used macro - prudential policy, in particular the loan - to - value ratio limits, to help moderate the risks in the housing market. this addresses the financial stability issue more directly and reduces the need for monetary policy to put pressure on interest rates and the exchange rate. what, other than monetary policy, will remedy the real exchange rate? saying there is little monetary policy can do about the exchange rate, is not the same as saying there is little that can be done. the reserve bank undertakes a great deal of research and analysis on the exchange rate. one example of this research was an exchange rate forum jointly hosted by the reserve bank of new zealand and the treasury earlier in the see http : / / www. rbnz. govt. nz / research _ and _ publications / speeches / 2013 / 5150125. html. chetwin, w and a munro ( 2013 ) “ contemporary exchange rate regimes : floating, fixed and hybrid ” paper presented to

would greatly improve the image of the region in front of the international community and it would make our final aspiration for eu membership easier to achieve. on the other hand, i think that we should benefit from the work in group for yet another reason. regardless of the different levels of the countries ’ developments and despite many other geopolitical factors, i hold the opinion that in the fields of economy, the banking sector, structural reforms, finance and markets, we show the same symptoms and to a certain degree, priorities converge. this is why i think that foreign assistance will be more effective. this is why i think that the several projects that may be prepared by the foreign donors would be more effective. i think that the region will show more or less the same progress without creating wide contrasts which – according to a long - term perspective – could emerge as serious problems. i hope that the agreement we signed today will only be the first step in the long road towards the comprehensive cooperation between our two institutions. personally, i consider the fields of payments, research, human resources and statistics as other areas of reciprocal interest. cooperation should be concrete and should serve to the adoption of better standards, as well as to the exchange of opinions with regard to various matters related to the regulatory framework. as regards the agreement of understanding in the field of banking supervision, i would like to emphasize the fact that a standard model which is in compliance with the european directives and the basel committee has been adopted. this is a concrete and appropriate common commitment with regard to cooperation in the field of supervision. it is worth mentioning that both parties, among other things, will extend their cooperation in the field of organizing common events as well as various training programmes of common interest. 1 / 2 personally, i think that the bank of albania has already developed its supervisory and analyzing capabilities to a satisfactory level, and as a consequence, i think that our assistance in this field will be useful. at the same time, i think that in the banking and payments authority of kosova, as a more recent institution, these capabilities are being developed at a satisfactory pace and i believe that its staff holds many practices and findings that they could offer to their colleagues at the bank of albania. at the conclusion of this short speech please let me express once more the great pleasure that this visit gives to me. i avail myself of this opportunity to assure my kosovar friends that they will always find in me and in the bank of albania an open window not