s aim. the governing council decided on a comprehensive package of measures with a view to ensuring that inflation moves towards the ecb ’ s aim in a sustained manner. the interest rate on the deposit facility was lowered from – 0. 40 % to – 0. 50 %. lowering the deposit facility rate helps to further improve the borrowing conditions of households and businesses. negative rates also encourage banks to lend to the real economy instead of holding onto liquidity. the forward guidance on the likely future direction of the ecb ’ s monetary policy was strengthened. specifically, it clarified that the ecb expects its policy rates to stay “ at their present or lower levels until we have seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2 % within our projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics ”. by reassuring markets that policy rates will stay “ at their present or lower levels ” until there has been an improvement in the inflation outlook, the ecb reinforced the impact of the cut in the deposit facility rate. the governing council further decided to restart net asset purchases at a monthly pace of €20 billion from november onwards. these purchases are expected to run for as long as necessary to reinforce the accommodative impact of the ecb ’ s policy rates, and to end shortly before the ecb starts raising its key interest rates. this is in addition to the reinvestment of the sizeable stock of assets the ecb has already purchased under the asset purchase programme. the modalities of the new series of targeted longer - term refinancing operations ( tltro iii ) were eased. banks can now obtain this long - term funding at lower rates with a 2 / 4 bis central bankers'speeches longer maturity. this should also help to ensure that the ecb ’ s accommodative policies pass through entirely to the funding costs of households and firms. finally, the governing council announced a two - tier system for reserve remuneration, in which part of banks ’ excess reserves held with the ecb will be exempt from negative rates. the two - tier system is designed to strike a balance between preserving the incentives for banks to pass through the stimulus generated by the negative interest rate on their reserves, and mitigating the adverse effects that these negative rates might have on banks ’ lending behaviour by affecting their profitability. the new two - tier system will make sure that banks ’ ability to extend loans to their customers

the assessment that the albanian economic activity will grow slowly over the period ahead, at levels comparable with those of the first half of the year. foreign demand will be the driver of economic growth in the coming quarters, while the first - half fiscal stimulus is likely to lack in the second half of the year. indirect data do not yet reveal any signals for consumption and private investment recovery. the below - potential economic growth will be associated with weak demand - side inflationary pressures and in the absence of any unforeseen supply - side shocks, consumer prices will increase at low rates. annual inflation, as to four quarters ahead, is expected to fluctuate around the 1. 1 % – 3. 8 % range, with a 90 % probability of occurrence. against this setting, our monetary policy will keep on preserving its stimulating nature even over the quarters ahead. also, we will continue to provide the banking system with all the liquidity needed for a smooth functioning of financial markets. concluding, the supervisory council decided to lower the key interest rate by 0. 25 percentage points, to 3. 50 %. the supervisory council deems that this lowering would create better monetary conditions to meet our medium - term inflation target, which will continue to guide our monetary policy. bis central bankers ’ speeches