The Bank of Albania has raised the lek interest rate for the third time in 2022 amid the global financial crisis that has seen inflation soar, driven by Russia’s invasion of Ukraine.
The bank’s supervisory council decided to increase the rate from 0.5% to 1.75%, the highest rate since 2015. Governor of the Central bank, Gent Sejko, said the changes in monetary policy are aimed at curbing increased prices.
“The new information received in the analysis suggests that inflationary pressures are wider and stronger than our previous estimates,” said Sejko.
The Bank of Albania expects a higher increase in inflation during the coming months, but nevertheless, the projections for economic growth are positive, although slower than the first part of the year. Additionally, the bank does not expect the country to fall into a recession based on the current scenarios.
Inflation in Albania reached 7.4% in June. The data for the month of July is expected to be published on Monday, 8 August.