ardian fullani : recent economic and financial developments in albania speech by mr ardian fullani, governor of the bank of albania, at the press conference on monetary policy decision of the bank of albania ’ s supervisory council, tirana, 25 may 2011. * * * today, on 25 may 2011, the bank of albania ’ s supervisory council reviewed and approved the monthly monetary policy report. based on a thorough analysis of albania ’ s latest economic and monetary developments and discussions on their outlook, the supervisory council decided to maintain the key interest rate unchanged, at 5. 25 %. the supervisory council judges that the current monetary conditions are appropriate to meet inflation target and continue the economic activity stimulus. let me proceed with an overview of economic developments and main issues discussed at today ’ s meeting. * * * the albanian economy continues to maintain a positive development trend. recovery in domestic demand over the first four months of the year and the positive contribution of external demand, have impacted on positive growth of the albanian economy. also, the major macroeconomic balances have remained stable and the financial system indicators appear to have generally improved. following the shock of february, cpi inflation has followed a downward trajectory, reflecting the subdued inflationary pressures on the economy and albanian financial markets. available data on 2011 q1 show that the economic activity has registered growth ; however, the persistence of some spare capacity suggests that this growth remains below potential. negative output gap implies the existence of low domestic demand - induced inflationary pressures ; however, persistent shocks to import prices caused inflation expectations to move up slightly. on the other hand, relative exchange rate stability and increased domestic food supply are factors that have made a positive contribution to lowering the inflation rate. aiming at stabilizing inflation expectations in the medium term, the bank of albania raised the key interest rate by 0. 25 percentage points at end - march. this move has been transmitted to financial markets, in line with the time lags of monetary policy transmission mechanism. inflation rate rose to 4. 1 % in april 2011, falling back gradually towards the bank of albania ’ s target. its performance has reflected the increases in food prices, in the excise tax of some goods, and to some extent, the administered price inflation. higher supply of agricultural products, likewise in march, made a positive contribution to lowering the annual inflation rate. compared to the previous month, consumer price index fell by 0. 6 %, hitting the lowest monthly inflation rate of april in the last decade. processed foods

imperative for member countries, companies and individuals. the survey reveals that 1 in 2 persons in the eccu are not financially resilient. i think of financial resilience as the capacity to absorb and bounce forward from a shock, such as a health event, a job loss, an economic downturn, a natural disaster or even a pandemic. let's face it, there are persons in the eccu who have experienced all these shocks during the past five years. when it comes to our personal finances, we must hope for the best but plan for the worst. never forget, hope is not a strategy. every citizen should aspire to be financially literate and resilient. armed with the results of this survey and seized with a sense of urgency, i issue a clarion call for a coalition of partners and champions ( institutionally and individually ) to join the eccb as we craft and implement a strategy to scale up financial literacy and inclusion in the eccu. the mission of the eccb is " to advance the good of the people of the currency union " where they do not merely strive but thrive. could you imagine what our currency union would be if every citizen were financially literate? we would be thriving! could you imagine if every high school graduate in the eccu were financially literate? to achieve this, we need our ministries of education and the caribbean examinations council to make this outcome a high priority. could you imagine the improvement in mental health, financial resilience and well - being if more of our people were capable of managing their personal finances? could you imagine if every workplace - starting with governments ( the largest employers ) offered financial wellness programmes? 3 / 4 bis - central bankers'speeches that would be a new day and a giant stride in our big push for financial resilience and wealth creation! this is a cause worth pursuing, with huge potential dividends. as a region, we cannot change our history nor can we change our geography, but collectively we can elevate our development trajectory through innovation and collective action. let us seize the moment and may god crown our efforts with resounding success. i thank you. 4 / 4 bis - central bankers'speeches