BANK OF ALBANIA STATEMENT
Interventions in the money market and foreign exchange market during the third quarter of 2006

Over the third quarter of 2006, the banking system continued to be characterized by excess liquidity, which has been decreasing compared to the first semester of the same year. The seasonal cash outflows over summer were the main reason for the dropping of excess liquidity. Unlike the first semester, the Government grew its demand for domestic financing through the issue of securities and withdrew part of the liquidity invested in the banking system through reverse repurchase agreements. The liquidity required for the maturity of reverse repurchase agreements with the Government was provided by the banking system through the maturity of primary market T-bills, which prevented the augmentation of Government domestic financing.