which 87 members from its staff presented their research and received valuable comments for further improving their work. three employees have been able to visit the graduate institute geneva to attend post - university studies for a period up to six months, and develop their research projects under the supervision of and assistance by renowned professors of the institute. the bank of albania is responsible for the formulation and implementation of the monetary policy, regulation and supervision of the banking system, regulation and development of the payment system, and promotion of financial stability. in the framework of the cooperation with seco, it benefits not only in academic but also in concrete terms. the developed forecasting and analysis models enable the monetary policy to play a more proactive role, as testified in the successful management of appreciation pressures on the exchange rate in the previous year. thanks to seco - funded cooperation projects, the bank of albania has adopted contemporary models and methodologies for evaluating the adequate level of the foreign currency reserve – currently 1 / 3 bis central bankers'speeches standing at eur 3. 3 - 3. 4 billion, managing liquidity in the banking sector, and withstanding adverse scenarios. also, the study of various phenomena related to the functioning of the financial system has prepared the ground for the drafting and approval of a series of regulations, which – among others – have accelerated the process for the reduction of non - performing loans and will create a safer and more efficient regulatory environment with regard to managing financial shocks. lastly, the cooperation with seco has generated a number of projects, which are being currently implemented in the field of payment systems. one particular example is the national strategy for promoting the use of retail payments, which serves, among others, to lowering their costs, promoting remittances and boosting financial inclusion. dear ladies and gentlemen, the new agreement, similarly to the previous one, enables the bank of albania to be part of a rich, deep and diverse programme of bilateral assistance and capacity building for central banks. through qualifications and capacity building, the goal of the cooperation agreement is to perfect the analysis, the decision - making and, consequently, the policy - making processes at the bank of albania. i think that we have already established firm foundations that guarantee an even stronger partnership for the second phase. expected outcomes from the implementation of the second phase include : monetary policy decision making sustained by improved forecasting capacities, macro - prudential policy formulated based on a larger body of knowledge about various risks ; and research further enriched with the best research method

plays a key role in this regard. the good financial health of our banking system and the progressive improvement of liquidity conditions and risk premiums in domestic and foreign financial markets are encouraging developments. the easing of monetary conditions and the liquidity injections by the bank of albania have supported and will further support this process. however, the reactivation of credit activity remains a challenging goal, which would require encouragement of the final demand and generation of business plans valid for bank financing, reduction of real and perceived risk in the economy, review of development strategies and commercial banks ’ lending policies, as well as reduction of cost and non - cost elements in lending. all these factors are envisaged to gradually improve throughout the year ; however, they will remain far from the pre - crisis levels. bank of albania ’ s monetary policy will continue to be prudent, chiefly oriented towards achievement of inflation target. the recent upward inflation trend might have been motivated by temporary - action and limited - intensity supply factors. the bank of albania has envisaged that the exceeding of 4 percent inflation rate will be for a short period of time and will not be followed by steady inflationary pressures. our projections show that consumer price inflation will fall gradually towards the 3 percent targeted rate during 2010. however, we remain committed to taking all appropriate steps to ensure this performance and meet our legal mandate for price stability in the economy.