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BANK OF ALBANIA - Fiscal Agent to the Government

The Bank of Albania also acts as fiscal agent to the most important client in the country - the Government. As a bank of the Government, the Bank of Albania performs a range of financial services amounting to billions of Albanian leks. The Albanian Government keeps an open account with the Bank of Albania, through which it makes domestic and international financial transactions. The Treasury functions (i.e. receipts and expenses performed daily by the Government) are not carried out directly through the Bank of Albania, but through commercial banks.

The Bank of Albania represents the Albanian state in all banking-related transactions with banks and foreign institutions. In this function, through the Government's accounts, the Bank of Albania serves as a mediator for disbursing foreign financing and paying matured debts.

As part of this service, the Bank of Albania sells and settles, on behalf of the Government, its securities (presently only Treasury Bills).

The Bank of Albania also issues banknotes and coins, distributing them periodically to banks and financial institutions of the country. The currency enters back periodically into the Bank of Albania, where it is counted, checked and put back into circulation or withdrawn from circulation when it is damaged, and replaced. Also, the Bank of Albania sequesters counterfeit money.

While providing services to the Government, the Bank of Albania does not extend unlimited direct credit to the Government. This provision is specified by the Law "On the Bank of Albania" and it seeks to prevent the Government from receiving loans at such high levels that would create problems for the balances of economic development. The limit of Bank of Albania financing (or its credit) to the Government is 5 to 8 per cent of average state budget revenues during the last three years. In addition, these credits shall be always guaranteed by the Government with its securities.

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