Albania’s central bank (BoA) will keep its key interest rate unchanged at 0.5%, as it estimates the current monetary policy stance as adequate, according to a statement by governor Gent Sejko delivered on Wednesday.
Sejko added that BoA will also hold the interest rate on the overnight deposit facility at 0.10%, and the rate on the overnight lending facility at 0.90%.
However, the central bank governor cautioned about the impact of the pandemics and related measures. The balance of risks remains on the downside due to the ongoing situation and most importantly the potential reintroduction of certain social distancing measures. This has the potential to increase interest rates and financing costs to the private sector, worsen credit supply and cause strong fluctuations of the other indicators of the financial market.
Albania’s central bank cut its policy rate to a new low 0.5% from 1.0% in March, aiming to manage the impact of the Coronavirus pandemic on the country’s economic and financial health. The interest rate corridor of the interbank money market was also revised – to 0.90% from 1.90%.
