Governor Sejko: Virtual meeting with the International Monetary Fund mission

On 17 September 2020, Governor Sejko and other representatives of the Bank of Albania had a virtual meeting with Ms Yan Sun, who led the recent IMF remote staff visit to Albania. This meeting took place in the framework of Post-Program Monitoring discussions.

The performance of the Albanian economy, developments in the financial system, the impact of pandemic on the economic growth and the expectation about the economic recovery in the next period were at the focus of this meeting.

Governor Sejko stated that the Albanian economy was under the strong impact of pandemic during the second half of year, which affected consumption, investments, employment and public debt. Nevertheless, the financial and banking sectors entered the pandemic liquid and well-capitalized. These parameters have continued to be maintained soundly.

In addition, Mr Sejko said that the relaxing of social distancing measures during the end of the second quarter, and both monetary and financial stability of Albania, have established the premises for a progressive reduction of pandemic impact on the economy in the following period.

In response to this crisis, Governor Sejko emphasised that the Bank of Albania has strengthened the monetary stimulus, by reducing the key interest rate and increasing liquidity injections, aiming to lower the financing costs and increase the monetary amount in the economy. Also, in collaboration with banking industry, the Bank of Albania has undertaken amendments to the regulatory framework, which have eased the temporary extension of the payments of credit and the restructuring of loans for clients facing difficulties.

The International Monetary Fund assesses that the Bank of Albania's accommodative monetary policy remains appropriate, providing the necessary stimulus to the economic growth and for the return of inflation to target within 2022.

Governor Sejko highlighted that the Bank of Albania remains committed to further enhancing the financial system, in collaboration with the other relevant regulatory agencies, and approximating our supervisory and regulatory framework with the standards of the European System of Central Banks and Basel Committee principles.

The International Monetary Fund stated that the near-term outlook for the Albanian economy remains challenging, reflecting the significant impacts from the November 2019 earthquake and the COVID-19 pandemic. Nevertheless, the economy is expected to see a rebound in 2021.

The Bank of Albania and the International Monetary Fund concurred that the coordinated fiscal, monetary and financial stimulus has been a crucial element in mitigating the negative consequences of the crisis.

At the end of the meeting, the IMF Mission thanked the Governor and the BoA's staff for the open and fruitful discussions.

Post-Program Monitoring discussions will continue during the next days.