Central Bank of Albania sets goals for 2007

TIRANA, Dec. 29 – The Monitoring Council of the central Bank of Albania discussed the most recent monetary developments in the country taking the proper steps to continue supporting the economic growth and preserving inflationist rates.
Annual inflation in November remained at 2.9 percent or lower than the three percent margin set from the Bank. It was influenced from the higher consumer prices ahead of the New Year festivities. The annual rate was 0.9 percent and that of the 11 months this year 2.4 percent. Inflation was also negatively affected by the increased electricity price which had affected it by 7 percent in November. The report of the bank said that the macro-economic general context was stable. Prices were also influenced from higher [prices in neighboring Italy and Greece, from where the Albanian wholesale businessmen get most of their products. The bank did not forget to remind the over-price of the lek compared to hard currencies.
Bank credits in the previous year had increased by 57.2 percent in October and its ratio to the GDP increased by 0.8 percent points that month reaching the figure of 19.5 percent. The budget sufficit in October fell by 3.6 billion leks and the government request for money increased by 6.4 billion leks. That helped to keep inflation low.
The bank also approved the monetary report for 2007 which is the basis of its work during the year. During 2007 the bank will aim at improving its tools of analysis and envisage of the economic and monetary policies and also transmit its decisions to the banking system and the financial markets in the country. The bank repeated that preserving the macro-economic stability is a precondition to secure a stable and long-term economic growth. That means equilibrium of the different sectors of economy, increase of employment, keeping inflation rate low or under control. The Bank report also insisted that its work would concentrate on preserving the prices’ stability. It would preserve the short-term interest rates.
The bank set keeping annual inflation at three percent (plus or minus 1 percentage point) was the main goal of the year 2007. That means that rate will follow the rate of the last six years. The bank would also aim at keeping the increase of the monetary offer M3 at 11.9 per cent in 2007. The main financial institution also set the goal of the domestic budget deficit at 25 billion leks. It also said it had no intention of intervening into the domestic hard currency market, tough it has normally been different all these years. It has time and again intervened in small amounts to keep exchange rates under control.
A main topic of interest for the bank in 2007 would be its transparency to the public. It said and listed the documents it would make public in 2007.