TIRANA, Oct 5 /ATA/ The Bank of Albania increased Wednesday the base interest rate for the lek by 0.5%, bringing it to 2.25% from the current 1.75%.
The Bank of Albania Governor, Gent Sejko, announced on Wednesday the increase in interest rates immediately after the meeting of the Supervisory Council, adding that “this measure was taken to curb the increase in prices beyond the inflation target of 3%.”
This is the fourth increase this year, reversing the trend of more than a decade of accommodative monetary policy, cutting the key rate to a historic low of 0.5%.
The first increase was in March, from a historic low of 0.5% to 1%. The second in July, where the base rate widened by 0.25% to reach 1.25%. In the third intervention in early August, the base rate reached 1.75%. While in today’s meeting, it increased by 0.5%, signaling the Bank of Albania’s concern about high inflationary pressures.
Sejko said that, “the new information included in the analysis suggests that the inflationary pressures are wider and stronger dictated by the war in Ukraine. This judgment reflects the rapid increase in prices in world markets, as well as the high demand for goods and services in the country. In these circumstances, the Supervisory Council decided to continue the process of normalizing the monetary policy.”
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