PRESS RELEASE
Q&A during the press conference on monetary policy decision-making of the Supervisory Council of the Bank of Albania, January 27, 2010

Question - As regard to the economy's external position, You spoke about a volatile external position. Does there exist any risk the economy to self-correct this position, even through the exchange rate channels and which will be its impacts?

Governor - I have repeated earlier that we have provided the right solution as regards the exchange rate regime. The flexible exchange rate regime in Albania has been remaining one of the guarantors of the sustainable developments of Albanian economy over the long run.

Question - What do you think about the latest plans of the Albanian Government on a possible reduction of the budget in 2010?

Second, the Government is planning 300 million Eurobond in May. What is the situation meanwhile in March the Government is waiting for an assessment from Moody's?

Governor - Bank of Albania welcomes the latest movements as regards the declining correction of the budget and which is completely in line with our suggestions, the international developments and the economic manoeuvres of many countries in the world. Fiscal policy shall dominate the world economic development in the future and consequently the economic policies as well. Therefore, any prudence in terms of the correction and consolidation of this policy is not only welcomed, but also indispensable. As regard to the latest movements, I think they are timely and compose a strong confidence and awareness sign, preconditions for more effective monetary polices and stable economic growth in the future I shall add. We encourage the Albanian Government to proceed quickly for the conclusion of the preparative work for the issuance of Eurobond. It is indispensable to act quickly for transmitting the right injection to the Albanian economy. Also, it is a welcomed measure, with regard to balance adjustment in general and the preservation of larger room and more efficiency for the developments in the private sector.

Question - Has there taken place any correction of the budget 2010?

Governor - Not yet, but the extended proposals are in line with the requirements of the Bank of Albania.

Question - It has been recently spoken about the issue of fiscal amnesty. Do you think that its implementation will be a current solution for the economy?

Governor - Every movement in the direction of economy formalisation, the adjustment of its balances and balance-sheets is welcomed by the Bank of Albania. Obviously, this is a rather complex process, which calls for a right preparation and an overall awareness of the all economic agents at home.

Question - The Government approved a few days ago the macroeconomic frame till the year 2012, where both Bank of Albania and INSTAT- preview a growth of 6% for the year 2010. Do you sustain the growth of 6% for 2010?

Second, at what extent do you think the flooding situation will affect the economy?

Governor - Bank of Albania is confident for a positive growth of economy in 2010.

With regard to the second question, we should wait for the bill and afterwards to judge seriously about the impacts.

Question - How much shall affect the flood situation in Shkodra the domestic economy? You mentioned the impact on agricultural outputs, what about the state budget, how much will effect on the pressures in the budget?

Governor - It is important to have the bill, but we should highlight the fact that the contingency funds are included in the budget.