The decision was taken by the central bank’s Supervisory Council following a review of its quarterly monetary policy report.

Governor Gent Sejko said the Albanian economy continued to post positive growth in the second quarter despite a challenging external environment.

Economic activity expanded at a solid pace, although somewhat slower than in the first quarter, while inflation increased due to higher international oil and energy prices and resilient domestic demand, Sejko said. He added that inflation remained under control and close to the central bank’s target.

According to central bank data, average consumer price inflation reached 3% in the second quarter. Economic growth continued to be supported by household consumption, investment, exports, tourism revenues and favourable monetary and financial conditions.

The governor said Albania’s banking sector remained sound, with financial markets characterised by ample liquidity and relatively low borrowing costs. Private-sector lending continued to grow strongly, with the loan portfolio expanding by 14% year-on-year in the second quarter, driven mainly by business investment financing and housing loans to households.

The central bank said the outlook for the Albanian economy remains positive, with growth expected to continue near its potential rate. Inflation is projected to remain slightly above target in the short term before gradually converging toward the target over the medium term.

However, the Bank of Albania warned that geopolitical tensions in the Middle East continue to pose risks to both the global and domestic economy, maintaining upward pressure on inflation and creating uncertainty for future growth prospects.

In addition to leaving the benchmark rate unchanged at 2.5%, the Supervisory Council also kept the overnight deposit rate at 1.5% and the overnight lending rate at 3.5%.

The central bank said it would continue to closely monitor economic and inflation developments and stands ready to use its monetary policy tools if necessary to preserve price stability.

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Governor Gent Sejko said at a press conference that the Council also kept the overnight deposit rate unchanged at 1.5% and the overnight lending rate at 3.5%.

The Council assessed that the current monetary policy stance remains appropriate, as it supports the baseline economic outlook and provides favourable monetary conditions for bringing inflation back to target.

Sejko said the decision also reflects continued uncertainty over future economic and inflation trends, allowing more time to monitor developments, including international oil prices, while preserving flexibility to respond to adverse shocks if needed.

He added that the central bank’s monetary policy will continue to be guided by the objective of price stability, ensuring that temporary supply shocks do not translate into persistent inflationary pressures.

“The Supervisory Council will closely and continuously monitor the situation and remains ready to respond in a timely, appropriate and forceful manner to any material risk to price stability,” Sejko said.

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The Governor of the Bank of Albania Gent Sejko said at a press conference on Wednesday that the Supervisory Council also decided to maintain the interest rate for the overnight deposit facility and the interest rate for the overnight lending facility unchanged at 1.75% and 3.75% respectively.

According to Sejko, the current monetary policy is appropriate for the central bank to deliver on its price stability target. Sejko noted that the projections suggest inflation will return to the 3% target level by mid-2026.

In this context, Governor Sejko said that the future monetary policy decisions will be determined by new information, and analyses and assessments of the development of domestic inflationary pressures.

Sejko stated that the Supervisory Council’s decisions will always be in line with the price stability target, consistent with the fiscal policy stance and the domestic exchange rate performance, as well as with potential developments in international markets and our foreign trading partners.

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