TIRANA, June.28 – Seeking to curb the threat of inflation, Albania’s central bank raised interest rates by a quarter of a percent, to a new base rate of 5.75 percent. The central bank’s governor, Adrian Fullani, told a press conference in Tirana on Wednesday that the risk of inflation had grown stronger lately, prompting the bank’s board of directors to act. The bank’s directors had observed a series of factors that could force prices to rise, including the expanding foreign trade deficit and greater access to consumer credit increasing the demand for goods and services. The economic indicators “prompted the bank to raise the interest rates and make the currency more expensive” in order to ensure stable economic development, Fullani said.
Albania has enjoyed macroeconomic stability after the country’s economy collapsed in a series of pyramid schemes in 1997 which sparked widespread rioting and near-anarchy. In the last five years, the central bank has kept inflation in the range of 2 to 3 per cent per year. Though the country has a looming trade deficit, remittances from the large Albanian emigrant communities in the European Union and the United States have kept the economy healthy. Albania ‘s fiscal and monetary policies are developed in close cooperation with the International Monetary Fund and the World Bank, which are the country’s main creditors.
