PRESS RELEASE
Meeting of the Supervisory Council of the Bank of Albania

The Supervisory Council of the Bank of Albania, in its meeting of November 24th, after having treated the proposals of the Department of Monetary Policy, decided to approve:

1. Monetary Policy Report of October 2004

Main highlights of the month:

1. Annual inflation marked 2.0 per cent in October, thus being within the Bank of Albania target. The average annual inflation marked 3.1 per cent. The monthly inflation of October was 0.23 per cent.
2. The demand factors have not exerted inflationary pressures during October. The effect of seasonal foodstuff price cut has continued to be present, balancing the annual inflation caused by the price rise of electrical power at the beginning of this year.
3. The international oil price rise has not impacted significantly on inflation, mainly due to the lek appreciation against the American dollar and the euro.
4. The Bank of Albania, in compliance with its monetary policy, cut the base interest rate by 0.25 percentage points in November 11th. The easing policy pursued by the Bank of Albania has brought further reduction of lek deposit interest rates, of the primary and interbank market. Generally, during 2004, a rapid response of banks to monetary policy signals is noticed.
5. The annual growth of monetary supply is stabilized at the level of 9.9 per cent in September, after the acceleration marked during the summer months. During September lek deposits gave the main contribution to monetary supply growth.
6. Foreign exchange position of the banking system is improved during September, when a growth of 31.5 million dollars was marked in net foreign assets.
7. The budget deficit is totally covered by domestic financing during September. The banking system has continued to finance the government by purchasing treasury bills and government bonds.
8. Credit to economy has marked satisfactory rise along the year, while a shifting of the portfolio is noticed towards longer maturity terms. However, the rise of credit balance to economy marked a slowdown in September, partly influenced even by exchange rate effect.
9. Meanwhile, the exchange rate of the lek against the euro during September-October has been generally stable, on average 125.4 lek/euro. The lek has been appreciating against the American dollar, reflecting the depreciation of the American dollar in international markets.

The policy report will be published soon in the Official Bulletin of the Bank of Albania.

2. Pursuant to Articles 43 and 44 of the Law No. 8269, dated 23.12.1997 "On the Bank of Albania" with the proposal of the Governor, the Supervisory Council of the Bank of Albania elected and nominated the following senior officials:

1. Mr. Fatos Ibrahimi, in the function of the First Deputy Governor of the Bank of Albania.
2. Mr. Limos Malaj, in the function of the Second Deputy Governor of the Bank of Albania.
3. Mr. Dashamir Halilaj, in the function of the Director of Humans Resources and Legal Department of the Bank of Albania.