Berisha Warns BoA to Move Cautiously on Rates

TIRANA, Feb 2 – Prime Minister Sali Berisha warned the central Bank of Albania to move cautiously in cutting interest rates in the future as aggressive moves could lead to lower savings rates.
Last week the BoA cut its repo rate by 0.5 percentage points to 5.75 percent in an effort to boost the economy, after keeping the rate unchanged at 6.25 percent throughout 2008.
Asked about the possibility of further interest rate cuts, Berisha said, “We need to be cautious. We will be very cautious because we also need to keep savings,” according to Reuters international news agency while he was taking part at the international economic forum in Davos, Switzerland.
“Albania currently is not affected by the crisis. Our banking system is full of liquidity because they never lend more than 50-60 percent of its deposits.”
Albania is expecting lower remittances from its immigrants worldwide and also less investment due to the world crisis.