In the beginning of 2012, when the economy entered a second phase, Bank
of Albania started facilitating quickly the monetary policy, pushing it
to never seen extremes.
After several reductions, the interest rate went from 4.5% to 2.75% in two years. This is the historic lowest point of the cost, which has given results. The government’s benefit is the lowered cost of the internatl market debt.
For the one-year debt, the interest rate has been lowered more than two times, from 7.1% that it was in January 2012, to 3.45 a few days ago. The same tendency has been followed by interests for other maturity terms. This has caused that despite the strong increase of the debt in the past two years, the total interest that the government pays remains unchanged. But this is not a win-win policy.
There is a small group that is losing, and that is the citizens who save their money, and according to the World Bank they are half of the population. The revenues from saving today are 2.5 times lower than the past year, and several times lower than two or three years ago. But besides this, the strong decrease of interests has another danger, that of encouraging the informal market, with citizens canalizing their money in dangerous investments outside the banking system.
Top Channel
