July 7 (SeeNews) - Albania's central bank decided to increase its key interest rate to 1.25% from 1% amid heightened inflationary pressures, central bank governor Gent Sejko said.
The central bank also raised the interest rate on the overnight lending facility to 2.25% from 1.9%, as well as the rate on the overnight deposit facility to 0.25% from 0.1%, Sejko said in a statement on Wednesday.
"The monetary policy normalisation will create more adequate conditions to safeguard the price stability and enable the return of inflation to target within a medium-term horizon. At the same time, this normalisation will not jeopardise the conditions for economic growth in the medium term," Sejko said.
Albania's consumer price inflation reached 6.7% in May, mostly as a result of the higher prices of energy and food on a global level. The central bank expects inflation to peak in the third quarter of the year and return to target in the first half of 2024, the statement read.
The central bank raised its policy rate to 1% from 0.5% in March, amid expectations for higher inflation. The interest rate on the overnight lending facility was also revised - to 1.9% from 0.9%.