was given to the bank of albania ’ s target, that is keeping up the annual inflation rate within the limits of 2 - 4 percent. in hitting this target, the monetary program aims the control of money supply growth so that the level of real monetary assets responds to the real needs of the economy for a 6 percent economic growth. the economy demand forecast does still rely on the quasi - constant velocity forecast of money circulation. this forecast, judging from the nominal gdp level, is the bridging gap between inflation and money supply growth ( intermediate objective ). the monetary program guarantees the observance of quantitative objectives set by the bank of albania, the level of nda and nir of the bank of albania within the limits and the control of government ’ s domestic borrowing at the level of 2. 7 of the gdp. 3. 1 money supply and its constituents money velocity is forecasted to be relatively stable during 2004. this assumption is based on keeping up the monetary developments trends of 2003 even for 2004. thus : • inflation is expected to be within the target of the bank of albania • interests rates are expected to be stable or in downward trend • the government demand, which is also the main source of requiring funds, is expected to be at the same level, 2. 7 percent of the gdp • the growth rate demand for the economy is expected to be almost the same as the 2003 one. based on these considerations, the m3 circulation velocity - as to trimesters - is presented as follows : table 3. money circulation velocity in 2004. ( gdp as to trimesters * 100 / m3 ) dec'02 march june 42. 9 43. 9 43. 9 september dec'03 42. 9 42. 9 march june 44. 1 43. 3 september dec'04 43. 2 43. 1 based on this forecast, the money supply is expected to grow by 10. 6 percent or by lek 47. 4 billion. 3. 1. 1 money supply constituents the ratio of money outside banks versus the money supply noticed during 2003 is not expected to undergo significant changes during the coming year. however, an upward trend of the foreign currency deposits ratio versus m3 is expected, bringing about a decrease of the lek deposits weight versus money supply. foreign currency deposits are expected to have a considerable annual increase, of about 18. 2 percent, or lek 17. 7 billion, by the end of 2004. table 4. money supply growth as to trimesters ( in

are basically family - run businesses, have a greater need to cooperate with non - bank financial institutions, due to difficulties they have in fulfilling the requirements for collateral or detailed financial documentation, criteria that banks require. this is another argument that leads to the logical conclusion that, in addition to own capital and bank credit, these enterprises would benefit greatly from other segments of the financial market. the low level of financial inclusion of the population is another element that prevents the deepening and expansion of the financial market in albania. latest data from the world development indicators show that only 38 % of adults have an account with a financial institution, while only 6 % and 22 % of adults have a credit card and a debit card, respectively. financial inclusion may not be increased only through the banking system. the financial system, especially the capital market and the corporate securities market should play a significant role in increasing financial inclusion. i take this opportunity to emphasise that, in addition to the need for expanding and deepening the financial market, it is necessary to increasingly pay attention to the management of risk that accompanies any financial investment. we are witnesses of a rapid technological evolution, which has practically eliminated physical boundaries, has eased access to electronic investment platforms, and has rendered very difficult the supervision and regulation of many innovative financial instruments that are traded in these platforms. the phenomenon of informality coupled with the speed of innovation in the field of financial instruments are a real risk for every investor that is naively driven by profit and does not stop to analyse the magnitude and nature of risk to which he is exposed. anyhow, inclusion should take place carefully, relying on specialised financial intermediaries and auxiliaries, whose activity is regulated and supervised by a legitimate authority in albania or abroad. dear participants, the depth and expansion of the financial markets determines the set of financial instruments eligible for trading, in a broad spectrum from the maturity perspective. these instruments are nothing more than consecutive steps in the monetary policy decisions pass - through mechanism. the whole process of instrument trading serves to determine the value of assets, the price of risk and savings, and, eventually, the propensity toward consumption, savings or investments. in this sense, the existence, completeness, and effectiveness of the financial market play a significant role in the monetary policy pass - through. this is the reason why the central bank places its focus on these markets and on their proper functioning. based on these specific reasons, the bank of albania has initiated, time ago