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Albania's c-bank raises key rate to 1.75% amid heightened inflationary pressures

Albania's c-bank raises key rate to 1.75% amid heightened inflationary pressures Albanian Central Bank building; Author: Enrique Íñiguez Rodríguez; License: CC BY-SA 3.0, via Wikimedia Commons

TIRANA (Albania), August 4 (SeeNews) - Albania's central bank decided to increase its key interest rate to 1.75% from 1.25% as inflationary pressures continue to increase, central bank governor Gent Sejko said.

The central bank also raised the interest rate on the overnight lending facility to 2.75% from 2.25%, as well as the rate on the overnight deposit facility to 0.75% from 0.25%, 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 over the medium-term horizon. At the same time, monetary policy will remain accommodative throughout the normalisation process, and it will not jeopardise the conditions for economic growth," Sejko said.

Albania's consumer price inflation reached 7.4% in June as a result of the higher prices of food, oil, and transportation on the global level. The central bank expects inflation to remain high in 2022 and return to the 3% target in the first half of 2024, according to the statement.

However, projections remain uncertain, with inflationary risks tilted to the upside and those related to economic growth - to the downside, Sejko said.

Since the beginning of 2022, Albania's central bank has raised its key policy rate twice - in July and March.

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