Konfindustra demands lower key interest rate

TIRANA, Oct. 30 – One day after the Bank of Albania decision, Albania’s business community represented by the Konfindustria Association called on Albania’s central bank to make a new cut to the key interest rate, a measure which its representatives say will increase liquidity in the economy and restore consumers’ confidence. “The visible increase of deposits in the banking system, the stability of Lek especially against the Euro and inflation rate in the 2-3 target band create the necessary conditions and time to achieve the desired success, that of increasing liquidity in the economy,” says Konfindustria administrator Gjergj Buxhuku.
Konfindustria says the request comes after sales, profit rates for most industries continue standing at low levels. Poor domestic consumption and an increase in unutilized capacities are clear indicators of lack of liquidity and declining consumer confidence. The Association warns a further decrease in domestic consumption would severely affect domestic industries.
Konfinduatria has also recently called for the establishment of a second-tier bank with a state-owned majority stake. “The establishment of a state-owned bank is a necessity considering that the Albanian economy and business are facing an unacceptable situation of lack of liquidity on the market which is revealed by the ongoing drop in domestic consumption by Albanian citizens and the continuous drop in lending to businesses at a time when the banking system is well-capitalized and has excess liquidity,” says Konfindustria in a statement.