Albania's C-Bank Cuts Key Repo Rate by 0.5 Pts to 5.25%

The Bank of Albania supervisory board decided to cut the rate after analysing in details the latest economic and financial developments, the macroeconomic outlook and the balance of threats in the coming months, central bank governor Ardian Fullani told a news conference after the board's regular meeting on Wednesday.

In January, the Bank of Albania cut the rate by 0.5 percentage points to 5.75% in a bid to ensure the country's macroeconomic stability amidst the global financial and economic turbulence. The cut was the first change in the rate since November 2007, when the central bank raised it by 0.25 percentage points to 6.25%.

The supervisory board saw positive development of the economy and a comeback of trust in the banking system in the third quarter of the year, Fullani said.

Albania economy grew by a real 5.3% on the year in the second quarter of 2009, maintaining approximately the same growth rate as in the previous quarter. However, the growth was slower than a year ago and first-half growth was 1.4 percentage points below the year-ago level, Fullani added.

"In the macroeconomic context, this slowdown reflects mostly on the fall of investments and foreign demand," said he.

The long-term economic outlook remains positiveb but this outlook will depend on the country's ability to attract financing and therefore the central bank's efforts will focus on boosting lending and attracting foreign direct investments in the medium and the long run, Fullani said.