2004. all this consolidating process has created the premises for a better stability in the future. the development program of the country for year 2005 already exists, part of which are the primary targets of monetary policy. the primary target of monetary policy for 2005, projected in the monetary program, remains the maintenance of the annual inflation rate within the two - to - four percent targeted range. this target is supposed to be met through the control of the monetary supply growth at an approximate level with the nominal growth of gdp, presuming that the velocity of currency circulation in the economy is stable. in this light, the annual growth rate of money supply for year 2005, projected in the monetary program, is 9. 4 percent. this rate is in compliance with the provided demand of the economy for money, coming from its real growth by 6 percent. the bank of albania monetary program is designed in line with other policies of the economy, where its harmonisation with the government fiscal policy is highlighted. the bank of albania estimates that like in the past years, even in 2005, the country's economic development will be in conformity with the overall development program objectives. the last developments of the banking system consolidate the optimism that it will fulfil to the best of its knowledge the role of financial intermediation in the economy. we deem that its consolidation will continue with accelerated rhythms throughout this year, providing to the large public more credits, more services and more security in the savings conduct. 2 / 2

as the disinflation process plays out, inflation expectations have also receded the way we want them to, and the risk of higher inflation expectations has diminished in the view of markets and surveyed experts. this would suggest that inflation expectations are well anchored. it is now up to us on the ecb governing council to prove our staying power. if we achieve that, we will soon make it over the finishing line. 4 monetary policy the third question i asked at the beginning has basically been answered : the phase of steep tightening was followed by nine months of unchanged key interest rates, after which the ecb governing council subsequently loosened the reins somewhat in june and now again in september. we don't know yet how things will unfold, but it is certain that key interest rates will not go back down as quickly and sharply as they went up! the intervals between the potential moves may vary depending on the incoming data, as monetary policy must remain tight enough for long enough to ensure that the inflation rate returns to the 2 % target over the medium term. assumptions to that effect about key interest rates also form the basis for the ecb's projections. ladies and gentlemen, public opinions on the best time for an interest rate move vary. this is due, not least, to the fact that the risks cannot be clearly quantified and that monetary policy time lags are impossible to measure with certainty. it is important for me to see inflation stable at the 2 % target as soon as possible. to get there, we will not pre - commit to any path in our decisions going forward. instead, we will continue to examine incoming data with an open mind. we are not flying on autopilot when it comes to interest rate policy. 4. 1 reducing the balance sheet i will now turn to the three topics specific to monetary policy. the key interest rates are the central lever with which to adjust the monetary policy stance. in addition, gradual balance sheet reduction also influences the direction of monetary policy. this is because the length of the balance sheet is ultimately driven by previous accommodative non - standard measures. banks'repayment of loans under the longer - term refinancing operations has thus far been the primary contributory factor towards reducing the eurosystem's total assets. remaining outstanding funds borrowed under targeted longer - term refinancing 4 / 7 bis - central bankers'speeches operations ( tltros ) are now only relatively small ( around €76 billion