gent sejko : overview of albania ’ s latest monetary and economic developments and outlook speech by mr gent sejko, governor of the bank of albania, on the monetary policy decision of the bank of albania ’ s supervisory council, tirana, 4 march 2015. * * * today, on the 4 of march 2015, the supervisory council of the bank of albania reviewed and approved the interim monetary policy report. after scrutinising the current and expected performance of inflation and other economic indicators, the supervisory council of the bank of albania decided to keep the key interest rate unchanged at 2. 0 %. * * * the domestic and external economic environment has generated low inflationary pressures. according to instat data, annual inflation was 1. 3 % in january, up from the rate registered in december. inflation fluctuations in the last two months have been determined mainly by the volatility in food prices. the fall in food inflation in december and its rise in january were driven by developments in international markets and the performance of domestic production. in parallel, the decline in oil prices has generated downward pressure on inflation. prices of other consumer goods ’ categories did not display any significant change. the rise in inflation in january was in line with our projections ; however, the rate of inflation remains below bank of albania ’ s target. the bank of albania evaluates that inflationary pressures will increase gradually and inflation will return to target within the medium term. however, bank of albania evaluates that inflation will remain below the target for the most of this period. its performance will continue to be determined by the degree of recovery in economic growth, supply - side domestic and external shocks, and economic and financial agents ’ inflation expectations. the albanian economy is assessed to have improved in 2014. according to instat data, the economic activity grew by 1. 4 % during the first nine months of the year. we expect the growth rate to accelerate in the fourth quarter, driven by the strong fiscal stimulus in this period. due to damages caused by floods in the south of the country, our projections on the performance of the economy during 2015 are revised slightly downwards. however, their effect is expected to be temporary and the economy is projected to remain in an upward trend in the medium term. economic growth for 2015 is projected to be higher than that in the previous year. the expansion of economic activity will continue to be driven, to a large extent, by private sector growth. foreign demand is expected to play a small positive

as the structural reforms undertaken by the bank of albania. in particular, the continuous investment made over the years has strengthened the resilience of the banking sector against shocks and has enabled it to continue to meet the demands for funds of the economy. in 2023, we have been working on the following : first, the bank of albania has improved its supervisory and regulatory framework, aimed at its approximation with the eu acquis and basel principles. second, the approval of the law " on payment accounts with basic features " by the assembly of the republic of albania, which was drafted by the bank of albania with the assistance of the world bank, and the regulation approved by the bank of albania " on the comparability of the fees related to payment accounts and payment account switching ", enable the consumer to access the bank basic services, despite their employment status and financial situation. third, the bank of albania drafted the document on the banking sector financial reporting, which is the first step for implementing the international standards on financial reporting and accounting. fourth, we have compiled and adopted the strategy on " management and supervision of climate - related risks in the financial sector ", in collaboration with the world bank. fifth, the bank of albania has continued monitoring the activity of banking sector, through on - site inspections and off - site analyses. examinations has focused on 4 / 6 bis - central bankers'speeches monitoring the completion of the regulatory requirements on capital, the assessment of governance systems and culture, the assessment of risk management regarding : capital and market risk ; operational risks, information technology risks, liquidity risks, as well as the assessment of transparency with clients. last, the bank of albania has continued the further enhancement of its resolution ability, alongside with its primary role in safeguarding the monetary and financial stability of albania. in addition, the bank of albania carries out various activities which are crucial in bolstering the development and growth of the overall wellbeing of the society. below, i will list briefly some of them. the bank of albania assures the smooth operation of payment systems. in particular, the new payment system for the settlement of interbank customer payment orders in euro, within the territory of the republic of albania – aips euro, since the start of its operation in january 2022, saved to the albanian households and businesses eur 50 million in the form of lower fees and commissions on payments. these savings amounted eur 37 million only in 2023. the development of payment infrastructure has supported