The Bank of Albania decided to increase the base interest rate of the lek by 0.25 percent.

The decision of the Supervisory Council comes in the wake of high inflationary pressures, which are expected to peak at the end of the summer season.

Projections are for an increase in basket goods prices between 7 percent and 8 percent.

"The high level of inflation is a primary risk for the sustainable growth of the country, we made a decision to increase the base interest rate of the lek by 0.25 percent", said Gent Sejko, governor of the Bank of Albania.

The base interest rate of the lek becomes 1.25 percent.

This will make loans more expensive and is expected to increase the interest on bank deposits.

Monetary policy will continue to be tight until prices stabilize.

The Central Bank's forecasts for the economy are for a slowdown during the remainder of the year, while the challenges ahead remain serious.

"The performance of the economy remains in the face of serious challenges, there is a slowdown in the Eurozone, inhibition of purchasing power and inflationary pressures.

We expect a slowdown in the rate of growth of the economy in the remaining part of the year", stressed Sejko.

The Bank of Albania sees the fiscal amnesty initiative as positive in injecting money into the economy, but with the risk of laundering the money of crime and corruption.

"The benefits are the injection of liquidity into the economy, and in the context of the formalization of the economy, it has a positive effect, but there is a cost with the avoidance of crime and corruption money, and mechanization is needed to prevent the money from being laundered," said the BSH governor.

In the wake of taking measures to curb the price crisis, the board of the Central Bank increased by 0.35 percent the overnight loan rate that the Central Bank gives to second-tier banks and by 0.15 percent the overnight deposit interest left with it.

/Telegraph/