interest rate may raise incentives for carry trade and aggravate increases in asset prices. in order to avoid financial imbalances resulting from excessive and unjustified we could state that, while the united states had an interest rate lower to that suggested by a taylor rule ( as suggested by taylor, 2008 ), this was probably not the case in chile, although i do not know of any evidence for or against this hypothesis. according to ahrend et al. ( 2008 ), between 2000 and 2003, australia probably also had a rate below the one suggested by the taylor rule. increases of these prices, the first line of defense should always be macro - prudential financial regulation and a thorough assessment of systemic risks, rather than changing the monetary policy stance. 4 as i have already mentioned, a fast expansion of credit does not necessarily mean jeopardizing financial stability. what is indeed harmful, and may certainly foster the creation of bubbles, is an either implicit or explicit commitment to substantially ease monetary policy when asset prices fall, unless the financial system is actually believed to be under serious risk. in short, this abundant liquidity, induced by an expansionary monetary policy and an increase in savings among emerging economies, particularly in asia, has boosted a housing bubble. however, although it was a component of the imbalances which had built up before the outbreak of the crisis, it certainly was not the main cause ; rather, such main cause is more related to the functioning of the financial system. that is, with the same path of monetary policy and global balances of savings and investment, an adequate risk assessment system could have averted the crisis or, at least, reduced its very large current scope. evolution of inflation during most of 2008, concerns about the global economic scenario were split between how to tackle the first effects of the housing bubble burst, mainly affecting the developed world, and, how to deal with the significant increase in inflation. since the beginning of this process, in the first half of 2007, we argued that its origin was related to factors which had nothing to do with the domestic business cycle, such as prices of food and fuels at international markets and adverse climatic conditions which favored major rises in the cost of electric power. during said year, prices of non perishable foods rose by 15 % and prices of fruits and vegetables rose by over 30 %, as compared to annual 2 % average increases and 2 % average decreases for both categories in the 2000 - 2006 period, respectively

the interbank market close to the bank of albania ’ s key interest rate. this change enhances the efficiency and transparency of monetary policy and promotes the further development of the interbank market. the bank of albania has taken all the necessary measures to successfully implement this project. * * * in its discussions today, the supervisory council of the bank of albania concluded that in absence of unanticipated shocks, cpi inflation will be in line with the bank of albania ’ s target in the medium - term. in addition, the supervisory council concluded that the monetary conditions are fully adequate to observe this target. in conclusion, the supervisory council decided to keep the key interest rate unchanged at 5. 25 percent. this decision is considered appropriate for the situation the albanian economy is in, providing at the same time the necessary monetary conditions for sustaining its sound development. concerning the future, the bank of albania remains fully committed to consider and follow up the actual and expected performance of economic indicators in view of maintaining price stability and firm up macroeconomic balances at home. the bank of albania invites all economic stakeholders to join this philosophy and provide their contribution to the stable and long - term growth of albania.