TIRANA, July 8 /ATA/ – A decision by the Bank of Albania to cut its key interest rate by 0.25% to 3% most recently will encourage borrowing and spending, Elvin Meka, an expert of the financial markets, told Albanian Telegraphic Agency (ATA) on Monday.
According to him the central bank’s move to ease its monetary policy for first time in two years sends valuable signals to the Albanian banking system and the national economy.
The economy expert Meka noted that lowered interest rate will cut cost of Lek-denominated loans and it will be reflected relatively fast throughout the country’s banking system soon.
On the other hand – he went on saying – the reduced cost of Lek-denominated loans would automatically lead to short-term and long-term lower cost of the public debt.
Meka noted that the central bank’s decision to slash its key interest rate signals a shift in its approach to the monetary policy following rapid fall of the inflation rate in the last two months.
The economics professor underlined that the monetary policy’s priority is to prevent the economy from sliding into deflation, which would imply much harder work to bring inflation under the central bank’s target.
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