PRESS CONFERENCE
Achievements of the Bank of Albania and its forecasting for 2004

I would gladly note that 2003 marked another positive step for the Bank of Albania in respect of its legal commitments, inflation target, banking system development, growth of foreign exchange reserve, a rather stable exchange rate, public image, etc. The Bank of Albania shot its inflation target maintaining thus the annual inflation within the range of 2-4 percent. The annual inflation rate in December - despite the unexpected increase of telephony prices -resulted 3.3 percent, whereas the average annual inflation rate was 2.37 percent.

The Bank of Albania conducted a successful campaign against the speculative increase of prices on the eve of year-end holidays. The conclusions were presented a few days ago, and the Bank of Albania is grateful to all the media for the cooperation and the support offered during the campaign. The monetary policy was characterized by a smoothing trend throughout 2003; the core interest rates were reduced by 2 percentage points upon four decisions made by the Supervisory Council. This did not bear any negative impacts on monetary indicators, which were in line with the monetary programmed forecasts. The Bank has observed its quantitative objectives, which are also its legal obligations, in the net international reserve level, net domestic assets and net domestic credit to the government. The banking system marked positive developments in supporting the economic development of the country with crediting and banking infrastructure, especially in regard to increasing the number of branches and services.

The most significant event of 2003 was the privatization of the Savings Bank from the Austrian Raiffeisen Zentral Bank. The success of this process lies not only on the good reputation of the bank, expected growth of competition, crediting and the banking system itself, but also on the higher confidence of the public in the banking system. 2003 recorded positive developments in the administration of the foreign exchange reserve. From USD 8369.6 million in January, it mounted to USD 1billion and 25.6 million on December 31st, 2003. In the last 2-3 years, the Bank of Albania focused on the variety of instruments employed, decision-making structure and investment strategies, as well as on the method of selecting and establishing benchmarks, estimating the investment upshot against risk towards the final objective of identifying performance-influencing factors.

The Bank of Albania appreciates developments in the scientific field, the payments system progress, campaigns undertaken, publications, cooperation with international financial institutions and native institutional actors, intellectuals, civil society and media.

Read the full text of the Governor's speech.