The efforts made by the Bank of Albania to boost lending seem to have been efficient since according to a World Bank report, the real interest rate of loans in Albania has decreased continually in the past years. The real interest rate decreased to 7.2 in 2014 from 9% registered in 2013, according to the report.
The continuous decrease of this indicator has been influenced by the monetary policies implemented by the Bank of Albania, with the aim to boost lending. According to experts, a low real interest rate shows that a country’s economy has low costs for supporting new investments. Compared to regional countries, Albania has one of the lowest real interest rate of loans.
The real interest rate of loans is measured by fixing the average annual interest of loans with the GDP’s deflator, which provides the price by which merchandises are traded on a certain period of time.
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