PRESS RELEASE
Bank of Albania interventions in the money market and foreign exchange market over 2014 Q2

1.1 Open market operations

Money market interventions during 2014 Q2 consisted of open market operations for injecting liquidity and permanent operations for structuring Bank of Albania's portfolio.

The total amount of injected liquidity averaged ALL 20.61 billion, from ALL 21.22 billion injected in 2014 Q1. Average injected liquidity was around 9.6% higher than in the previous year, when it amounted to around ALL 18.8 billion.  

During 2014 Q2, liquidity in the banking system was affected negatively (- ALL 3.27 billion) by the cash effect, and positively (ALL 4.7 billion) by the budget effect.

To inject temporary liquidity, the Bank of Albania employed its main instrument, the one-week reverse repurchase agreement, on average, ALL 14.29 billion a week*, and the one-month reverse repurchase agreement, on average, ALL 2.07 billion a week*. Overnight injection operations on 18-23 April 2014 aimed at supplementing the difference created on the last days of the reserve maintenance period.

In 2014 Q2, outright transactions continued, aiming at lowering BoA's participation in T-bills up to to 70% of total issue. Since BoA's portfolio during the first quarter of 2014 was up ALL 100 million from end-2013, in the second quarter of 2014 Bank of Albania intervened to purchase 12-month newly issued T-bills for the announced amount of ALL 300 million, followed by downward reinvestment in 6-month Treasury bills for ALL 200 million. The purchase intervention was realised for only ALL 150 million. Therefore, during the second quarter, the increase in BoA's portfolio was adjusted for ALL 50 million.

1.2 Use of standing facilities

The overnight deposit facility was used six times, averaging ALL 0.11 billion, at the same frequency of use as in the previous quarter, when it averaged ALL 0.12 billion. The overnight credit was used six times, averaging ALL 0.45 billion. In 2014 Q2, this facility was employed six times and averaged ALL 0.63 billion.