On the meetings of the Bank of Albania Governor, Mr. Shkëlqim Cani, during the Spring Meetings with International Monetary Fund and the World Bank

Publication date: 26.04.2004


During his visit in USA, Mr. Shkëlqim Cani, the Bank of Albania Governor and simultaneously Governor of Albania at the International Monetary Fund, took part in a number of meetings with the representatives of the IMF, WB and FSVC.

The developments of the Albanian economy in general and the monetary ones in particular were the main topic of the discussions with the representatives of IMF. The Governor made a presentation, for the representatives of IMF, on the last developments of the economy and on the performance for the fifth year in order of the inflation target, as well as on the preparations of the Bank of Albania for the shifting in middle - term period regarding the inflation targeting regime. Mr. Cani on behalf of the Bank of Albania requested and received the support of the representatives of the IMF for this process. An important topic of the discussions was the Program of the Bank of Albania "Beyond Cash" and the serious commitment of all the authorities and banking system throughout this process.

In the meetings with the representatives of World Bank, the discussion was mainly concentrated on the initiatives of the Bank of Albania on the reduction of cash in economy and the development of a modern payment banking system. After the successful end and the start of functioning of "The real time gross settlements" financed by the World Bank, Bank of Albania has finalized the functional technical requests for the new payments project, named Automated Electronic Clearing House. Based on the positive experience of the fulfillment of the previous project, the representatives of the World Bank guaranteed the Governor on the financing of this project.

Meeting with Mr. Andrew SPINDLER, (FSVC).

The first meeting of Mr. Cani took place in New York with Mr. Andrew Spindle, Director of the Financial Services Volunteers Corporation. The Governor, in his speech made a presentation of the main developments of the Albanian economy during the last year and the challenges for a stable development and the reform toward European Integration.

In relation with the collaboration with FSVC the Governor highlighted the positive development of the banking supervision, audit, statistics and the management of human resources in the Bank of Albania. Under this process, stated Mr. Cani, the technical assistance of FSVC has played an important role as well, for which I thank You".

Mr. Spindler expressed the assessments on the steps that Bank of Albania has undertaken in the reforming process toward the standards of the modern central banks, thus establishing its physiognomy throughout the integration process of Albania.

The technical assistance of FSVC in the future will be mainly concentrated on the process of banking supervision, banking system restructuring, etc, through the advisors and missions of technical assistance.

At the same time, FSVC will collaborate with the Bank of Albania regarding the assessments of the researches and studies performed by it.

The Governor invited Mr. Spindler to attend the Vth International Conference of the Bank of Albania that will take part during October 2004.

Meeting with Mr. Biaggio Bossone and Mr. Aghday Hormoz (World Bank).

In the meeting with the Executive Director of the World Bank, for Albania, Italy, Greece. Malta, Portugal, San Marion and East Timor, Mr. Biaggo Bossone, and in the meeting with Mr. Hormoz, financial chief specialist, the Governor primarily made a presentation of the economic development in Albania. Pursuant to Mr. Cani, "the Albanian economy has recorded an increasing rhythm of the Gross Domestic Product for 2003, assessed at 6 per cent, of an inflation rate 3.3 per cent, increase of foreign reserve at over 1 billion USD or 4.7 months of import etc..

Mr. Bossone stated that Albania has marked positive success within a short period of time, but still remains a lot to do regarding the coordination of the work among the institutions and the performance of the commitments. "It will be rather important for your country to have the development strategy, where the work of institutions converges into the same sight".

The difficulties of establishing institutions, especially the independent ones, the need of communication and debate of the ideas, the transparency ad indispensability of information publication from all the responsible institution, were other topics of discussion during the meeting between the Governor and Mr. Bossone.

Meeting with Mr. Liugi Passamonte (World Bank).

In the meeting with Mr. Luigi Passamonte, special assistant of the President of the World Bank, the main topic was the project of Convergence. The project aims to give the opportunities to all the representatives of the market to extend their opinions and the coordination of these ideas in service of a general strategy of the country development. The project, which will be fulfilled with the assistance of the World Bank, will be finalized with a assessment of the presented ideas and the compilation of a general plan on their implementation.

Meeting with Mr. Michael Deppler, Director of EU 1 Department.

Governor Cani In his speech, made a presentation on the main developments of the domestic economy and the expectations after the privatization of Savings Bank by Raiffeisen Bank. The new situation of banking system will establish the conditions for a more aggressiveness of banks in supplying banking products. Banking system in cooperation with the Ministry of Finances and the Ministry of Economy have started the program on the reduction of currency circulation outside banking system

Mr. Deppler stated that the FMN confirms the assessments on the positive performance of the Albanian macroeconomic situation and the good willingness for the increase of the technical assistance of IMF on FSAP as well. This assistance will ensure an assessment of banking system from both the IMF and WB.

An important place during the meeting was occupied also by the discussion on the way of using the funds ensured from the privatization of the Savings Bank. The participating parties confirmed that the income will be used as it is agreed on the previous agreements and commitments between the Albanian Party and the IMF.

Meeting with Mr. Carlo Padoan, Executive Director of IMF for Albania, Italy, Greece, malta, Portugal, San Marino and Timor Leste.

Inflation development, resulting 3, 3 per cent in 2003, which is within the target of the Bank of Albania, was the presenting topic under the discussion between the Governor Cani with Mr. Padoan. In his speech, Mr. Cani stated that the expectations for the inflation of 2004 are for maintaining inflation under control and within the targeting band of the Bank of Albania, 2 - 4 per cent.

"After the privatization of Savings Bank", went on the Governor Cani, "the banking system has performed a rather positive step toward the further development and it is previewed to be increased the aggressiveness of banks in the system by providing various services".

Mr. Padoan stated that the International Monetary Fund assesses as positive the macroeconomic development in Albania and emphasized that the Albanian economy is on the right track.

At the end of the meeting, Mr. Cani and Mr. Padoan discussed also on the process of appointing the New Executive Director of IMF.

Meeting with Mr. Stephan Ingves, Director of Monetary and Financial Department, IMF.

Governor Cani thanked the IMF on the Technical Assistance Missions in Albania and then stopped on the discussion for the technical assistance in the framework of FSAP.

Mr. Cani discussed on the implementation Inflation Targeting Regime during the middle term period, as a priority of the monetary policy of the Bank of Albania and in this aspect he stated that the long - term technical assistance of IMF will help the successful fulfillment of this project.

The privatization of Savings Bank, the capital required for opening a bank in Albania, legal and administrative issues of banks' liquidation etc, were other issues under discussion.

The assistance of the IMF on the evaluation of the analyses and studies of the Bank of Albania for the enhancement and consolidation of the Research Department were another point under the discussion, etc.

Meeting with Mrs. Carol Carson, Director of Statistics Department.

Mr. Cani began with an overall description of the economic development in Albania and the data system as well. The Albanian economy has recorded an economic growth throughout the recent years, the inflation was kept under control, the exchange rate of Lek against the foreign currencies has been relatively stabile and the inflation rate has recorded a modest decrease.

Mr. Cani went on regarding the year 2003, the economic growth is estimated to be at 6 per cent, inflation 3,3 per cent, budget deficit increased at 5,6 per cent of GDP, being very close to the data of the countries that will join European Union in May 1, 2004, etc.

Mr. Cani thanked Mrs. Carson for all the technical assistance that IMF has provided to the Bank of Albania in the statistics area.

Both parties considered as rather important the steps that Albania should perform for the improvement of the methodology and coherence for the national data, the study of informal economy level, the data of the balance of payments, the inclusion of Albania in the system of SDDS data, etc.

The Governor invited all the directors of the departments and the well- known experts of the IMF he met with, to attend the International Conference of the Bank of Albania that will be held on October 2004.