Central Bank targets a 3% inflation rate for 2009-11

TIRANA, June 23ؓtable prices are the top priority set by the Bank of Albania (BoA) in its monetary policy planning for the next 3 years (2009-11). The 3-year objectives are a reflection of BoA’s goals in the past; well know for its success in keeping inflation levels below the 5% range. The target inflation rate is set at 3%, based on annual change in the consumer price index rate that is measured by INSTANT, with a Ѡ1% tolerance.
However, there will be partial changes regarding the program to be implemented in order to achieve such objectives. Such changes will depend on financial market developments and the possible impact of the economic crisis (global and domestic) on prices. Indeed, setting the inflation goal over a long term perspective will allow for short fluctuations beyond the aimed threshold as a result of short term market events which cannot be controlled by instruments of monetary policy.
BoA is positive that a long term inflation goal will contribute toward economic growth, restore trust in the financial market, and improve economic expectations and the related decision making of business and individuals alike.
In addition, a low inflation rate of 3% will help the preservation of positive real interest rates. It will boost generation of savings and halt financial fluxes in support of investment in the economy and will ease the convergence of our transitory economy with the developed economies of the EU.