BANK OF ALBANIA
Governor Sejko attends the Central and Eastern European Forum organised by Euromoney
Publication date: 11.01.2023
On 10-11 January 2023, the Governor of the Bank of the Bank of Albania attended the Central and Eastern European (CEE) Forum. This annual event hosted by Euromoney brings together renowned figures from academia, leading stakeholders in economy and finance from the CEE countries - to discuss the latest economic developments in the European countries and in Southern and Eastern Europe.
Governor Sejko was invited to discuss in the panel designed for central bank governors from CEE countries, on: “Monetary policy: a fiscal accelerator, monetary breaks - managing the conflict”. In this panel, were present as well: the Governor of the National Bank of the Republic of Macedonia, Ms Anita Angelovska Bezhoska; the Governor and Chair of Board of the National Bank of Georgia, Mr Koba Gvenetadze; and the Deputy Governor of the Magyar Nemzeti Bank (central bank of Hungary), Mr Mihály Patai.
Debates in this panel focused on important topics related with the economic actuality; challenges of the regional economies originating from the rapidly high inflation, the response of central banks in this context; the coordination of monetary and fiscal policies between the authorities; and the long-term challenges that the new economic and geopolitical reality triggers to emerging economies.
In his remarks, Governor Sejko presented an overview on the latest developments in the Albanian economy and the impacts of recent crises. The Governor stated that the Bank of Albania has embarked on a normalisation cycle of monetary policy stance over 2022, by raising the policy rate to 2.75% at the end of 2022, from the historical minimum of 0.5% at its beginning.
In this context, the primary objective of central banks for safeguarding the monetary and financial stability of economies becomes more complex, given the new external supply-side shocks, like the rising prices in international markets, trigged by the Russia's war in Ukraine and which jeopardised price stability worldwide.
Mr Sejko emphasised that the monetary policy regime implemented by the Bank of Albania - flexible inflation targeting - provides the right discretion in decision making, as long as it takes into account both the final objective of price stability and the need to mitigate the consequences of the shock on the economy.
To this end, the preservation of financial stability requires the continuous and active participation of all other institutional actors. Mr Sejko highlighted the need for coordination between monetary and fiscal policies.
“Overall, these polices should be coordinated with each other, aimed at controlling and returning inflation to target at a lowest cost on the economic activity. In this view, fiscal consolidation in Albania has been in line with the monetary policy normalisation.”, - said the Governor.
Nevertheless, the Governor pointed out that within its limits, the fiscal policy has played a primary role in mitigating the impact pf this shock on the Albanian economy.
During this two-day Forum, Governor Sejko held meetings with prominent international personalities, senior officials of central banks, as well as representatives of various commercial banks.