TIRANA, Nov. 22 – Failure to elect in time new members of the central bank’s supervisory council has temporarily paralyzed decision-making at the Bank of Albania, a key institution for the country’s economic and financial stability.
The seven-year mandates of six out of nine members of the Bank of Albania’s supervisory council expired this month, leaving the highest decision-making body at the central bank with only three members and unable to make decisions.
Procedures are already under way to elect the six new members, three of whom proposed by the government and three others by the Parliament, but the process could be delayed as the main opposition Democratic Party and their allies who are eligible to propose candidates have been boycotting Parliament since early September.
Albania’s central bank postponed two meetings of the supervisory council this month where it was supposed to decide on the monetary policy and the bank’s budget for next year.
Governor Gent Sejko, whose 7-year term expires in 2022, is among the three remaining members of the supervisory council, which makes the key decision-making at the central bank, primarily related to preserving price stability through an inflation target of 3 percent and preserving financial stability.
Albania’s central bank has been undertaking emergency currency exchange operations since last June after Europe’s single currency hit a 10-year low against the Albanian lek, in sharp depreciation of about 10 percent compared to last year. The central bank intervened in the country’s free floating exchange rate regime by purchasing excess euros from the local currency exchange market in a bid to stabilize the Albanian lek and curb a series of negative effects, primarily affecting Eurozone-destined exports and sizeable Euro-denominated deposits and remittances. The central bank also cut the key rate to a new historic low of 1 percent to handle disinflation pressure from cheaper imports and stimulate credit growth and consumption through lower interest rates.
