BANK OF ALBANIA STATEMENT
On the Bank of Albania interventions in the money market and foreign exchange market during the third quarter of 2005

The banking system was characterized by an excess liquidity in the first month of the third quarter of 2005. However such an excess experienced decline, resulting in the lack of liquidity in the banking system in the second half of the third quarter, mainly due to the growth of money outside banks. With a view to enhancing banks' confidence, the Bank of Albania started injecting liquidity into the system in the second half of July, regardless of the positive values of liquidity in the system. Such an injection was interrupted for one week, in order to correct the level of net domestic assets indicator. Restarting in the second week of August, the injection of liquidity through one-week reverse repurchase agreements resulted in about ALL 2.4 billions per week.

With a view to enhancing competition in the primary market, the Bank of Albania injected liquidity constantly through the purchase of treasury bills from the commercial banks' portfolio. The treasury bills purchases totalled ALL 3.50 billion.