PRESS RELEASE
Bank of Albania interventions in the money market and foreign exchange market over 2014 Q4

1.1 Open market operations

Money market interventions during 2014 Q4 consisted in open market operations for injecting temporary liquidity and permanent operations for structuring Bank of Albania's portfolio.

The total amount of injected liquidity averaged ALL 28.21 billion, close to the level of ALL 28.06 billion in 2014 Q3. Injected liquidity averaged around 76% higher than a year earlier, when it amounted to around ALL 16.05 billion.

To inject temporary liquidity in the last quarter of the year, the Bank of Albania employed its main instrument, the one-week reverse repurchase agreement, on average ALL 23.68 billion a week*, and the one-month reverse repurchase agreement, on average ALL 2.45 billion a week*. During the first two weeks of December, the three-month reverse repurchase agreement was also employed - on average ALL 1.85 billion per auction*. Three overnight injection operations were employed respectively on 17 October to adjust the liquidity amount in the system due to the change of factors to negative direction, and on 22-23 December, which correspond to the last working day of the reserve maintenance period, as the one-week injection auction did not fulfil the target.

In 2014 Q4, outright transactions continued, aiming at lowering BoA's participation in T-bills not exceeding 70% of total issue. In the last quarter, three outright sale auctions of three and six-months Treasury bills were organized, lowering BoA's participation in these securities for the amount of ALL 220 million. An auction also organised to purchase newly-issued 12-month T-bills, for the announced amount of ALL 100 million. As at end-2014, BoA's portfolio was ALL 35 million lower than in the previous year.

1.2 Use of standing facilities

The overnight deposit facility was employed 35 times, averaging ALL 5.39 billion, against 27 times in the previous quarter, equivalent to the return of liquidity to the BoA for ALL 2.07 billion per day. The overnight loan was employed twice, on 23 October and 23 December, corresponding to the end of the  maintenance period for ALL 1.95 billion and ALL 2.39 billion respectively. Chart 1 summarises Bank of Albania interventions in the money market during 2011-2014.