BoA keeps rates unchanged at 6.25%

TIRANA, Jan 5 – The central Bank of Albania decided at the final meeting of 2008 to keep its base rate unchanged at 6.25 percent, very likely not cutting the rate due to a widening account deficit.
The deficit widened to 13.7 percent of GDP, a record high, in the wake of a two-year rise fuelled by higher prices of imported commodities and increasing public expenditure.
Financial authorities have indicated that 2009 could very likely be a difficult year for Albanians and their businesses.
Albania’s government and the central bank have said they remain worried about the impact of the world financial crisis on migrants working abroad because remittances are critical for the Albanian economy and play an important role in bridging the country’s widening trade deficit.
A study published on December 6, covering the first three-quarters of 2008, showed remittances from Albanian emigrants working abroad were 623 million Euros, down 13 percent on the same period in 2007.
Emigrants even bring about seasonal fluctuations in the local currency, the lek, as well as fluctuations in trade. Banking, construction and the entertainment industry also rely on emigrants for a good portion of their businesses.