TIRANA Dec 21 Albania's central bank held its
key benchmark rate at the historic low of 1.5 percent on
Wednesday and pledged monetary stimulus until at least mid-2017,
its governor Gent Sejko said.
The bank also kept its overnight deposit and lending rates
on hold at 0.25 percent and 2.25 percent respectively, Sejko
said, adding that the decision was "sufficient" for reaching the
bank's inflation target.
"Based on the expected developments and associated risks,
the Supervisory Board believes the intensity of monetary
stimulus will not die down before the second half of 2017,"
Sejko told reporters after a session of the board.
The central bank sees growth improving over the next two
years, he said, fuelled by a revival of private demand as the
government consolidates fiscal policy amid continuing "weakness
and uncertainty" in key trade partners Italy and Greece.
Albania has approved a budget for 2017 envisaging 3.8 growth
in gross domestic product, compared with 3.4 percent in 2016.
The impoverished, formerly communist Balkan country has
managed to revive its growth rate since the 1.1 percent
registered in 2013, but is struggling to match the average of
5.5 to 6 percent achieved between 2000 and 2009.
Sejko said that data showed "economic activity is improving,
inflation rising gradually to its target, and a financial
environment favourable for helping us reach our goals.
"In line with these forecasts, economic activity is
expected to return to its balance within 2017 and inflation ...
to return to its target in 2018," he said.
The bank previously said it would clinch its target of 3
percent inflation in mid-2018. Annual inflation in November was
1.9 percent, up 0.4 percent from October, Sejko said.
He said he expected the government to maintain its policy of
fiscal consolidation enshrined in the 330 million euro ($344.19
million) deal with the International Monetary Fund (IMF) due to
expire in February.
"The current deal reached its goals ... A new agreement
(with the IMF) will have to be decided after the general
elections (in June 2017)," Sejko added.
($1 = 0.9588 euros)
(Reporting by Benet Koleka; editing by Mark Heinrich)