PRESS RELEASE
Questions and answers at the press conference on 7 August 2019

Question: In recent days, many clients of one of the main and largest commercial banks operating in Albania have voiced a concern because this bank has decided to increase the commissions paid for cash transactions at bank desks. Is the Bank of Albania aware of this development and can it intervene in such a case where citizens are saying that these commissions are unfair and costly for their pockets?

Governor: We are in a free market, where banks may increase their commissions, provided that they comply with transparency criteria and contractual terms and conditions. Higher commissions surely affect competition, as a bank that raises prices becomes less competitive vis-à-vis other banks.

The Bank of Albania, as a regulatory institution, does not intervene directly to determine prices applied by commercial banks. Of course, we are very sensitive toward this element, in view of our primary objectives such as: fight against informality, increasing financial inclusion of the population and enhancing financial literacy. In this regard, we have undertaken a number of measures and initiatives.

We monitor and supervise whether banks are complying with the transparency criteria. For this case, we have undertaken a concrete inspection, in order to check for bank’s compliance with the relevant rules and conditions, in accordance with the transparency regulation of the Bank of Albania.

We have taken concrete initiatives on modernizing the payment systems, we have prepared the draft-law on payment services, which will not only ensure the modernization of payments in Albania, but will also contribute to lowering costs for private economic agents and households. This draft-law is finalised and is ready to be send to the Assembly. In addition, we are working on another draft-law, on payment account. Its goal is to increase financial inclusion of the population and it will also contribute to reducing costs.

Apart from these two draft-laws, the Bank of Albania has undertaken three concrete initiatives to modernize the payment systems in the Republic of Albania in order to decrease costs for economic agents and households.

These are: the implementation of payment system to settle euro payments domestically, which will accelerate the time of making payments in euro, and will bring costs down; the implementation of a national SWITCH, a platform that will allow a faster and more modern processing through card and mobile phone payments which will decrease cost as well; and a national platform of real time processing of payments that will avoid the use of international processing procedures for card payments. These are three concrete initiatives and their implementation will contribute to reducing costs.

So, we are concerned, not only due to the price impact that affects the consumers, but also more so in light of increasing financial inclusion and the further formalisation of the economy, as well as offering better banking services and products. The broader the base of the banked population, the more facilities are created and the narrower economic inequality gap.

These are the things that a central bank can do. In this case, we will have to wait and see if contractual conditions and the transparency requirements are complied with. Beyond that, the Bank of Albania has no legal right to interfere with pricing.

Question: What are the concrete plans of the Bank of Albania to intervene on the performance of the euro, as the appreciation of lek continues? Has the volume of the euro changed from the previous year?

Governor: This is a sensitive question that is regularly posed and we respond accordingly. We are at the peak of the [tourist] season. This means that the depreciation of the euro and appreciation of the Albanian lek is a result of the tourist season. We have a free exchange rate regime in Albania. The rate is determined by supply and demand in the market. Understandably, the added supply comes from the tourist season.

The Bank of Albania has made it clear long ago, since the moment it approved the market intervention programme, that it would intervene to collect the surplus of euros if its primary inflation target were affected. We monitor the market daily, even more often during the day, to check the fluctuations of the exchange rate. The behaviour of the exchange rate, besides the strong appreciation of the national currency, has been under regular and normal parameters; we have no disorderly behaviour. Obviously, we will intervene if our inflation target is affected, but we are not yet in those parameters. The only significant factor for this appreciation is the seasonal effect.