BANK OF ALBANIA STATEMENT
Interventions in the money market and foreign exchange market during the forth quarter of 2008

1. Bank of Albania interventions in the money market

1.1. Open market operations

Money market interventions during the forth quarter of 2008 encompass the open market transactions for the purposes of injecting liquidity to satisfy the banking system demand for this latter.

Bank of Albania, to inject liquidity, employed its main instrument, the reverse repurchase agreement of one-week maturity. On weekly bases, it has been injected at an average of LEK 9.33 billion.

In order to balance the banks' reaction against the interest rates supplied by the Bank of Albania to acquire the liquidity, Bank of Albania changed the type of reverse repurchase agreement auctions of one-week maturity to fixed price auctions and deployed the reverse repurchase agreements of longer maturity than one-week as well as the standing instruments. In concrete terms, there were injected an average of LEK 3.2 billion in three application cases of the reverse repurchase agreements of one-week maturity and LEK 3.25 billion in two applications cases of the 3-month reverse repurchase agreements.

Bank of Albania purchased outright treasury bills from the commercial banks amounting to LEK 11 billion (nominal value).

1.2. Use of standing facilities

Banks made use of the overnight deposit, whose average daily level amounted to LEK 2.78 million, during the forth quarter of 2008 compared to LEK 5.07 billion in the previous quarter, for the purposes to invest the free liquidity created on daily basis.

The overnight loan instrument was employed minimally at LEK 0.17 billion in one case of application.

The following chart provides a summary of the Bank of Albania interventions in the money market during the year 2008.