PRESS RELEASE
Decisions by the Supervisory Council of the Bank of Albania, 6 April 2016

On 6 April 2016, the Supervisory Council of the Bank of Albania, in addition to the decision to lower the key interest rate to 1.5%, reviewed and decided to:

• Approve some amendments to the regulations "On overnight deposit facility and "On overnight lending facility

Overnight deposit and lending facilities are instruments in the form of standing facilities, which the Bank of Albania makes available to the commercial banks for their liquidity management. Interest rates on these instruments define the corridor of short-term interbank rates.

The Supervisory Council decided that the interest rate of these instruments will not be determined by the relevant regulations, but by a special decision of the Supervisory Council.

This decision aims to increase the flexibility in the use of this instrument and is in line with the latest practices of other central banks.

• Approve the interest rate on overnight deposit and lending facilities

The Supervisory Council decided to set the interest rate on overnight deposit and lending facilities at 0.25% and 2.75%, respectively.

After this change, the corridor of interest rates in the interbank market narrowed from 3.5 percentage points to 2.5 percentage points. The narrowing aims at reducing interest rate fluctuations in the interbank market and contributing to the pass through of Bank of Albania's monetary policy easing.

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In the end, the Supervisory Council was also informed on the daily functional and operational activities of the Bank of Albania.