manner, embarking on a gradual and prudential normalisation of the monetary policy stance. in complete coherence, supervision and careful regulation of the banking sector, continuous investment in advancement of the payment system, along with innovation and digitalization of financial services, have all contributed to development of the financial sector and strengthening the stability of our country. 1 / 2 bis - central bankers'speeches albania's perspective remains positive. however, the experience of recent years has taught us that shocks and challenges, no matter how remote they may seem, will not be absent in the future. at this point, let me broaden the scope of the discussion somewhat. for a long time now, low growth of productivity, the effects of population ageing and labour force limitations have been turning into increasingly important factors affecting the development of the economies of our constituency. in addition, geopolitical fragmentation and the effects of climate change are becoming present challenges. but what do these challenges mean for us as policy makers? the answer is both straightforward and complex : we must ensure economic and financial stability, establish a more efficient, innovative and inclusive economy, as well as invest in the green and digital revolution. allow me to be more specific. first, as a central bank, we must take the fight against inflation to the end. its downward trend is good news, but declining inflation is not an inflation on target. therefore, central banks should continue to focus on taking the necessary measures to return inflation to the target, as a prerequisite for the sustainable growth of economies and the well - being of citizens. second, we must insist on rebuilding fiscal spaces in timely manner, so that we are as prepared as possible to withstand future shocks. third, financial policies should continue to have a twofold focus : on the one hand, inducing financial progress with a view to boosting efficiency and, on the other hand, addressing risks to financial stability early, through prudential regulation and supervision. finally, structural policies should be increasingly oriented towards fostering sustainable growth. in the global and european contexts, in the face of a complex geopolitical reality, we must work to maintain - as far as possible - economic integration and free markets for products, labour and capital. this is a process that has brought remarkable progress to all involved actors. in parallel, the domestic structural reforms should focus on supporting innovation, training and continuous re - qualification of the labour force, as well as on stimulating both green transition and technological revolution. meanwhile

and at wellsuited maturity terms, in order to boost activity in the financial markets and lending to the economy. in response to this policy, the interest rates in the interbank market were stable, reflecting largely the stable liquidity position in the system, while long - term interest rates maintained a downward trend as a result of lower risk premia. in the primary market, government security yields of all maturity terms continued to decline in the second quarter. in addition, this period featured further growth of banking system deposits and their time - related shift to time deposits. once household savings placed in the system increased, the interest rates on deposits showed a downward tendency. on the other hand, private sector credit continues to post low growth rates despite the improved liquidity figures and the lower activity financing costs. the annual growth of private sector credit averaged 9 % in the second quarter of 2010. the credit market continues to feature volatile interest rates and tight lending conditions. however, the latest months ’ developments show positive signals, particularly in terms of the rather higher credit growth rates, its greater orientation towards supporting investments and the recovery of foreign currency lending to economic units that enjoy natural hedge against exchange rate risk. the bank of albania has been promoting this performance and will continue to do so, and encourages the banking system and borrowers to work harder in finding effective forms, instruments and practices that fuel credit. * * * today ’ s decision - making of the bank of albania reflects a comprehensive analysis of : the economic and financial developments that have been characterizing the albanian economy in the latest months, the developments in the region and broader, the balance of risks, and future forecast and expectations. the bank of albania believes that the banking system will transmit this decision to the economy timely and at the right intensity. the growth in deposits, the banking system ’ s liquidity position and the downward government demand provide real room for greater orientation of funds to private sector lending. the bank of albania will also pay due attention to foreign currency intermediation by the banking system. the performance of foreign currency - denominated deposits and a wide array of other developments provide a safe ground for their channelling into the economy at a lower cost. this will be followed up closely in the remaining of 2010 and beyond. the bank of albania considers that the monetary conditions and the demand - supply ratios in the major markets are well - suited to maintain price stability in the medium run. our monetary policy will continue to be prudent in view of meeting the