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Albania's c-bank keeps key rate unchanged at 0.5%

Albania's c-bank keeps key rate unchanged at 0.5% Albanian Central Bank building; Author: Enrique Íñiguez Rodríguez; License: CC BY-SA 3.0, via Wikimedia Commons

TIRANA (Albania), May 6 (SeeNews) - Albania's central bank decided to keep its key interest rate unchanged at 0.5%, as it sees the current monetary policy stance as adequate for bolstering economic growth and for the stable return of inflation to target, central bank governor Gent Sejko said.

The central bank also decided to hold the interest rate on the overnight deposit facility at 0.1%, and the rate on the overnight lending facility at 0.9%, Sejko said in a statement on Wednesday.

The recovery pace of economic activity accelerated and the economic outlook has been improving during the last two quarters. Nonetheless, the economic rebound is incomplete in the current stage and the supportive factors are yet unconsolidated, Sejdo added.

The economic consequences of the pandemic are still notable as aggregate demand remains low and unemployment continues to increase, whereas inflation remains below the central bank's 3% target.

"In this view, the Supervisory Council deems that the monetary policy stance should continue to be accommodative. The monetary stimulus will serve to bolstering consumption and investments, which in turn will fuel the rise in employment, wages, and profit margins, in line with our inflation target," Sejko said.

Albania's central bank cut its policy rate to record low 0.5% from 1.0% in March 2020, aiming to mitigate the impact of the coronavirus pandemic on the country's economic and financial health. The interest rate corridor of the interbank money market was also revised - to 0.9% from 1.9%.