TIRANA, Aug. 5, 2022 – Ongoing increases in inflation have led Albania’s central bank, the Bank of Albania, to increase its base interest rate by 0.5 percentage points today to 1.75 percent — the third increase since March.
“High levels of inflationary pressures are the primary risk to the sustainable and long-term growth of the country,” said Governor Gent Sejko following the decision taken at the meeting of the Supervisory Council of the Bank.
Since the beginning of this year, inflation in Albania, just like globally, has seen continuous increases, peaking at 7.4 percent in June.
According to the Bank of Albania, “inflation is expected to remain at high levels during 2022.”
The central bank predicts that “inflation will return to our 3 percent target in the first half of 2024,” noting, however, that “these projections continue to remain subject to high uncertainties.”
The base interest rate had remained unchanged for years at its lowest historical levels, at the rate of 0.5 percent. But this March 2022 BoA intervened for the first time by increasing it by 0.5 percentage points, to continue with a second move in July, with an increase of 0.25 percentage points. This week it did the third intervention in the span of a few months.
