Central Bank Raises Interest Rates
6 July 2022 – Tirana News Digest. Albania Central Bank increased its main interest rate by 0.25% to 1.25, hoping to fight inflation and warned of further increases ahead. The bank’s expectation is that the inflation will peak by fall this year “not much above the current levels” before falling back, providing that the war in Ukraine doesn’t escalate.
Inflation in Albania soared to 6.7% last month. Bank governor Gent Sejko said the inflation is moving from supply shock increases in food and energy to a broader base. The higher inflation is eating into the country’s growth potential, according to Sejko, however, Albania is not expected to fall into recession.
However, Albanian currency lek is strong and currently is priced at the highest level in decades at 118 leks per euro. Many believe the strength of Lek derives from the abundant influx of dirty money laundered in Albania by organized crime.
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