ardian fullani : bilateral opportunities between albania and china speech by mr ardian fullani, governor of the bank of albania, at the meeting with the banking sector, introducing the bilateral swap agreement on national currency exchange between the bank of albania and the people ’ s bank of china, tirana, 2 april 2014. * * * dear bank executives and representatives, dear guests, i would like to welcome you to this round table between the bank of albania and the banking system in albania. today ’ s discussion will focus on the bilateral agreement signed by the bank of albania and the people ’ s bank of china ( pboc ), and the opportunities the agreement offers. on 12 september 2013, in yerevan, armenia, with the governor of the people ’ s bank of china, mr. zhou xiaochuan, we signed a swap agreement on the bilateral national currency exchange between the republic of albania and the people ’ s republic of china. for the bank of albania, this important financial instrument will have a positive impact on widening and deepening of trade exchanges between the two countries. most importantly, this agreement will have a positive impact on another aspect : expansion and deepening of the financial market in albania. the economy, its agents, including financial institutions, are provided with an additional opportunity to contribute together to the quick recovery of economic activity, lending more to the economy, and the country ’ s financial soundness. the agreement is reached in the light of the considerably increasing share of the people ’ s republic of china in both the global economy and international financial system. the financial cooperation between the two central banks reconfirms the excellent relations between the two institutions, which culminated with the landmark visit of pboc ’ s governor zhou xiaochuan to the bank of albania in 2011. this cooperation materialises the increasing share of trade exchanges between albania and china. moreover, it precedes the potential increase in financial and capital transactions between the two countries. despite quantitative differences between the economy of albania and the economy of china, we expect the trade exchanges with china to increase in the period ahead. potentially, financial ties will also be strengthened. china is albania ’ s third trading partner, by origin of imports ( behind italy and greece ), and is an important station of our exports. in the last year, 5 % of albanian exports targeted the chinese market and 6. 7 % of our imports originated from china. strong trade relations provide the foundations for strong financial relations. history has proven that trade

conducive to a balanced and sustainable growth of the economy. promoting macroeconomic stability is crucial because it serves as a solid springboard for households and businesses to flourish. as us president franklin d. roosevelt famously declared in his state of the union address in 1944, and i quote : “ true individual freedom cannot exist without economic security and independence. ” indeed, ensuring economic stability and security is in the best interest of a nation. i am pleased to report therefore that we continue to register solid gains in providing a stable environment for our economy to grow and for our people to benefit from opportunities that development brings. among others, philippine inflation in may was 1. 6 %, our lowest in 20 years. at this rate, we are able to preserve and protect the purchasing power of our people. by comparison, our inflation reached its highest at 50 % in 1984 or three decades ago, when problems related to politics and economics converged. we had a debt crisis : with our gross international reserves insufficient to meet our overseas obligations, we declared a moratorium on foreign debt payments, which in turn triggered a credit freeze. as a consequence, government had bis central bankers ’ speeches to ration scarce foreign exchange by prioritizing importation of critical commodities such as oil, medicines, and dairy products. the credit squeeze also pushed domestic interest rates higher, with housing loans going for over 30 %. it was during this period when many filipinos went overseas to find better opportunities. today, things are so much better in the philippines. we now have ample international reserves that have enabled us to fully prepay our loans to the international monetary fund, after 45 years of indebtedness. and we have liberalized foreign exchange transactions. among others, with minimal documentation, individuals can purchase as much as one hundred twenty thousand dollars ( $ 120, 000. 00 ) per transaction from banks. interest rates have also been lower, with some housing loans going for 5 % per year. the banking system is sound, stable and liquid, with bank capitalization more than compliant with global standards. in fact, last year, in a field of 69 jurisdictions, the philippine banking system earned the distinction of receiving the only positive outlook rating from moody ’ s. moving forward, we are confident that our banks can hold their own when asean banking integration takes place by 2020, as part of the wider implementation of the asean economic community ( aec ) by the end of 2015. in preparation for this, a new law was passed