Quarterly Monetary Policy Report 2016/III

The Bank of Albania judges that the Albanian economy continues on a positive development trajectory. Economic activity expanded in the first half of the year, inflation showed upward trends in the second quarter, and the accommodative monetary policy stance provided for a liquid financial environment with low interest rates. The new available information and update of analyses have not produced any significant changes to our medium-term forecasts. In this horizon, the Bank of Albania expects economic activity to improve progressively, creating the premises for the gradual return of inflation to target. In line with the analyses in this Quarterly Monetary Report, the Supervisory Council decided to keep the key interest rate unchanged, at 1.25%. Moreover, the actual monetary policy stance, as regards both the key interest rate and the forward guidance on its future course, is assessed as adequate for complying with the price stability objective in the medium-term period.