PRESS RELEASE
Governor Sejko attends the Central and Eastern European Forum organised by Euromoney

On 12-14 January 2021, the Governor of the Bank of the Bank of Albania attended the Central and Eastern European Forum (CEE). It is an annual Euromoney event that brings together renowned figures of politics, economy and finance from CEE countries. The proceedings of this forum took place virtually due to Covid-19 pandemic.

Governor Sejko was invited to deliver a speech in the panel on monetary policy, together with other central banks’ governors: Ms Anita Angelovska Bezhoska, Governor of the National Bank of the Republic of North Macedonia; Mr Koba Gvenetadze, Governor of the National Bank of Georgia; Mr Kyrylo Shevchenko, Governor of the National Bank of Ukraine; and Mr Boštjan Vasle, Governor of the Bank of Slovenia.

The discussions of this panel were greeted by Mr Alfred Kammer, Director of the European Department, International Monetary Fund (IMF).  The governors discussed on the crucial role of central banks and their responses to the situation posed by pandemic; the support these institutions have provided to overcome the economic difficulties in the respective countries, throughout this period; as well as, the policy-making strategies to ensure and support the return of economic growth in the years to come.

In his remarks, Governor Sejko discussed on the latest developments in the Albanian economy and the impacts of pandemic. Mr Sejko highlighted that the measures taken throughout this period by the Bank of Albania and the Government focused on cushioning the business, households and the financial system from the negative effects of the crisis. These measures aimed at avoiding this inevitable short-term shock would not turn into a long-term crisis.  The contribution of the Bank of Albania and the well-coordinated macroeconomic policies succeeded in this regard. The economic activity is expected to improve during this year, which has just started, after the sharp fall marked in 2020.

The Governor stated that the current global crisis triggered by pandemic differs in many ways from the global crisis of 2008.  First, the economic consequences were due to the implemented restrictions and not due to the bursting of the bubble, which led to a large-scale crisis, like that of 2008.  Second, the negative impacts are expected to be short-term in nature, and if thanks to vaccination the situation will go back to normality, then the return would be quick.  Last, public policy was direct in nature, by intervening to financially compensate the businesses and households for the lost income, through the implementation of a set of instruments similar to those in the previous crisis.  As such, the policies intervention provided a direct positive effect and is expected to prevent the developing of long-term weaknesses in the private sector.

Mr Sejko explained more specifically, the measures undertaken by the Bank of Albania in response to the situation created, such are: lowering the policy rate and ramping up liquidity injections; temporary regulatory facilitation of payment deferrals and loan restructuring; freezing the dividend payments in the banking sector; as well as, removing the fees on interbank transactions in the payment systems operated by BoA.

Governor Sejko underscored that the banking sector also has provided a quite positive contribution in facing the crisis.  In addition, the sector responded positively and actively to the decision on the short-term moratorium on credit instalment to certain categories of borrowers and credit restructuring to other categories, which has shifted part of the crisis’ financial burden to the balance sheets of this sector. Lending has continued to increase, thus helping with liquidity to enterprises and households facing temporary difficulties, and supporting the continuation of investments.

Related to the behaviour of consumers, the Governor emphasised that the crises triggered by the pandemic has urged to considerable digital and financial innovations, in response to the social distancing measures, smart working regime and the change of consumer's attitude. In this regard, the demand for the use of electronic instruments has been upward. The Bank of Albania has best accommodated this demand, through infrastructural improvements in its payment systems, the decrease of costs for the use of these systems and the approval of the Law on Payment services. 

Concluding, Governor Sejko underlined that the work of the Bank of Albania remains focused on preserving the monetary and financial stability of Albania.  In a medium- and long-term outlook, with the mitigation of pandemic negative impact, the agenda of economic policies and structural reforms in Albania is expected to go back to its strategic goals prior to the crisis, aiming at returning to the economic growth.