BoA Cuts Key Rate to Record Low to Curb COVID-19 Hit

TIRANA, March 25

The bank of Albania (BoA) has cut its key rate to a record-low of 0.5 percent from 1.0 percent in a bid to alleviate the economic impact from the new coronavirus pandemic, BoA’s Governor Gent Sejko said on Wednesday.
Sejko said that precautionary measures taken by public and private authorities to halt the spread of the COVID-19 virus to the population will have a dual impact on economic activity.
“On the one hand, the temporary reduction in production and employment leads to a decline in the supply of goods and services to the market and a reduction in household income. On the other hand, social distancing brings down demand, as well as shrinking sales, income, and business liquidity,” Sejko said.

Moreover, he added that this is a necessary measure to reduce the cost of new lending, the cost of servicing existing debt and to facilitate the flow of liquidity to businesses and households.
Previously, BoA  launched a series of emergency measures to help stabilize markets such as:

Increasing its operational capacity to guarantee the supply of the economy with currency and banknotes, as well as to ensure the smooth functioning of the electronic payment system;
Adopted the operational strategy of unlimited liquidity injection into the banking sector;
BoA’s Supervisory Council decided to simplify by three months the rescheduling procedures for the payment of credit installments to businesses and households affected by the crisis, providing the banking sector with the necessary regulatory framework to do so.

Source: BoA