economic growth under price stability. in doing so, it is important to not focus too much on short - term developments in economic activity and prices, but instead to pay close attention to medium - to long - term risks that could lead to instability in the financial system, and thereby aim to achieve economic and price stability in the long run. this contributes to the sound development of the national economy, thereby maintaining and enhancing the credibility of the bank ’ s policy into the future. bis central bankers ’ speeches

of 2008, although the end of the period showed signs of their downward growth rates. average annual growth rate of money supply was about 13 percent. a small part of deposits were withdrawn from the banking system in the last months of 2008 as a result of depositors ’ concerns following the vague situation in the global financial system. in relative terms, these withdrawals made up a small share in commercial banks ’ balance sheets and did not affect the banking system ’ s soundness indicators or impair its financial intermediation role. credit to the private sector continued to provide the main contribution to money growth. in annual terms, credit growth fell during the second half of 2008 relative to the first half the same year. intermediation indicators increased further ; the ratio of loan portfolio to deposits and total assets was 63 and 43 percent, respectively, as of end november. following september, the structure of loan portfolio by currency displayed a higher annual growth rate of lek denominated loans. the performance of loan portfolio by customer attests to higher annual growth rates of business loans relative to household loans. in contrast to the first half of 2008, loan portfolio to construction and trade shifted downward while loans to industry increased slightly in the second half of the year. the performance of money markets during the second half of 2008 was conditioned by the developments in monetary indicators and the real economy. as experienced by many countries, the increased vulnerability of banks to liquidity has brought about the reduction in the interbank trading volume and upward interest rates on deposits. the coverage ratio of government demand for money has reduced and some risk premiums have increased in the last two months. this performance brought about the increase in government securities ’ interest rates and in a few cases in the loan interest rates. in response to these developments, the bank of albania intervened in the money market by injecting liquidity at different maturity rates. in addition, the central bank changed in november the form of repo auctions to auctions with undetermined amounts in order to better satisfy the banks ’ needs. * * * economic and financial developments have by and large been positive during 2008. economic growth performed in line with the early year projections, while the main indicators of macroeconomic and financial stability remain solid. the negative impact of developments in global economy was marginal. however, as in other emerging countries, the albanian economy cannot remain immune for long to the direct or indirect impact of the global economic crisis. the bank of albania public statements have constantly noted that