BoA cuts interest rate to cope with global crisis

TIRANA, Jan 28 – The Central Bank of Albania has cut its interest rate by 0.5 percentage points from 6.25 to 5.75 percent in an effort to boost the economy and minimize the impact of the global financial crisis.
The move also followed recent pressure from business associations and was also the first cut in the past two years.
The bank governor, Adrian Fullani, told reporters the interest rate cut was a measure to give “additional breath to the country’s economic activity” and also “a direct contribution in minimizing the negative effects coming from the international crisis and helps the further economic and financial balances of the country.”
Fullani said that Albania coped well in 2008 with the global effects, adding that macroeconomic indicators had resisted well.
But he also noted that the last two months had shown some signs of risk based upon the bank interfering in the free market to keep exchange rates stable.
The fall of the remittances and of issuing credit in the country are factors that could negatively affect the country’s economy this year, he said.
The interest cut will prod second-tier banks to lower their interest rates for credit.