Fin Minister dissatisfied with central bank’s monetary policy

TIRANA, June 1 – Finance Minister Ridvan Bode has said he is unsatisfied with the monetary policy followed by the Bank of Albania, accusing it of awkwardness in treating the crisis and incoherent measures compared to those taken by other European central banks.
Speaking at a World Bank conference, Bode demanded lower interest rates by both the central and commercial banks, a measure which would revive lending and investments.
“As seen, developments in the Eurozone have a very rapid dynamism and this is what the bank and we must do to be in the same accord and not become a barrier to the economic growth,” said Bode.
“Because of the economic competition, the businesses’ profit rate is getting lower and lending in high interest rates of course creates problems,” added the minister.
The Bank of Albania, which cut the key interest rate to 5.25 in October 2009 has been criticized of not further lowering the repo rate to boost lending.
However, the central bank says the policy is not suitable for Albania because a further cut in the key interest rate would cause the depreciation of the national currency Lek and could bring rapid inflation. The central bank’s main goal is keeping the inflation rate at a 3 percent target, plus/minus 1 percent, a target it has achieved in the first months of this year.