ardian fullani : recent economic and monetary developments in albania speech by mr ardian fullani, governor of the bank of albania, at the press conference on the monetary policy decision of the bank of albania supervisory council, tirana, 29 june 2011. * * * today, on 29 june 2011, the supervisory council of the bank of albania reviewed and approved the monthly monetary policy report. based on an analysis of albania ’ s latest economic and financial developments and following discussions on their performance outlook, the supervisory council of the bank of albania decided to leave the key interest rate unchanged at 5. 25 %. the supervisory council holds that the actual monetary conditions are appropriate for meeting the inflation target and for continuing to stimulate the economic activity. let me now proceed with an overview of economic developments and main issues discussed at today ’ s meeting of the supervisory council. * * * annual inflation pointed to 4. 2 % in may, remaining close to preceding months levels. under higher foreign prices pressure, the prices of “ processed foods ” and “ non - food consumer goods ”, including oil, were the main contributors to inflation rates. in the meantime, the seasonal effect of increased domestic supply of fruits and vegetables is reflected in a lower contribution of the “ unprocessed food ” to inflation. the rise of some administered prices and the effect of higher excise tax rates for some goods continued to provide a constant, but positive, contribution to annual inflation. inflation ’ s performance over the recent months was consequent to the balance of two main factors ’ opposite actions. on the upward trend, high primary commodity and raw materials prices in world markets were transmitted to the domestic inflation in the form of higher imported inflation. in the short run, this phenomenon also contributed to core inflation, which was up compared with last year. high net inflation rate of non - tradable goods showed that a part of higher commodity prices materialised in second round effects in inflation. latest developments in inflation affected also the economic agents ’ inflation expectation, which, however, remain within the target band of the bank of albania. on the downward trend, domestic economy developments continued to provide an environment with contained inflationary pressures. our assessments on economic activity suggest positive growth rates for the first quarter, although below the potential. under these circumstances, the albanian economy continued to be characterised by spare productivity capacities – labour and capital – and negative output gap, continuing to exercise downward pressures on inflation. similarly, the monetary development analysis confirmed the presence of contained monetary

shkelqim cani : review of the albanian economy statement by dr shkelqim cani, governor of the bank of albania, for euromoney yearbooks, global banking and financial policy review, tirana, 9 august 2004. * * * the albanian economy experienced a recovered pulse of economic growth over the year 2003. positive developments are marked in respect of consolidating the country ’ s macroeconomic stability, economic growth and a sound development of the financial system. a recovery in economic activity and 6 % growth of gross domestic product in real terms was proved by all sectors of the economy, but was particularly evident in the construction, transport and services sectors, which are the most dynamic sectors of albanian economy. the year 2003 was characterised by a low inflation rate, within 2 % - 4 % of the targeted range. the inflation rate as of december was 3. 3 %, meeting the bank of albania ( boa ) target. despite the various factors this low rate emerged from a diligent management of the domestic demand as an outcome of appropriate fiscal and monetary policies. boa ’ s monetary policy has been a moderate one throughout 2003. such a trend will continue during 2004 and was recently reflected by the reduction of the core interest rate in the economy. since april 2003 the repo rate has been lowered by 2. 5 %. the 6 % repo rate, decided on may 12, 2004, is the lowest ever in the albanian economy. the policy aims to reduce borrowing costs in the economy and maintain price and financial stability. at the end of 2003 the foreign reserves of boa reached us $ 1. 03bn covering 4. 7 months of imports. boa continues to maintain its view of a free exchange rate regime. this was reflected in the fewer episodes of boa ’ s intervention in the foreign exchange market during the first half of 2003, when the purchase of foreign currency was almost four times that of the second half of the year. nonetheless, this did not hold back the domestic currency from appreciating against the euro and the us dollar, with a stronger appreciating trend in place in the second half of the year. the appreciation of the domestic currency was one of the factors behind boa ’ s 2. 0 % interest rate cut during year 2003. monetary indicators have generally been performed in compliance with the forecasts set out in the bank ’ s monetary programme. the annual growth rate of lek deposits was 19. 1 % by the