TIRANA, March 25 (Xinhua) -- The Supervisory Council of the Bank of Albania (BoA) decided to lower the key interest rate to 0.5 percent, the BoA's Governor, Gent Sejko, announced here on Wednesday.
Via a Facebook video message, Sejko said the central bank decided to lower the key rate from 1.0 percent to 0.5 percent in an effort to soften "the effects of COVID-19 pandemic on the economic and financial health of the country."
"The central bank also decided to lower the overnight loan interest rate from 1.9 percent to 0.9 percent and to keep the overnight deposit interest rate unchanged at 0.1 percent," Sejko said.
Sejko explained that the coronavirus outbreak poses a challenge to the Albania's economy and financial sector.
"In the judgment of the BoA Supervisory Council, lowering the key interest rate is a necessary measure to reduce the cost of new loans, to service the existing debt, as well as to facilitate the flow of liquidity to Albanian businesses and households," Sejko said.
Sejko said that the BoA has increased its operational capacity to guarantee the supply of currency and banknotes and to ensure the smooth operation of the electronic payment system.
The central bank, according to the governor, has adopted the operational strategy of injecting unlimited liquidity into the banking sector.
Sejko confirmed the BoA's readiness "to use all operational instruments available to minimize the consequences of the pandemic in the Albanian economy and financial system."
In coordination with the Albanian government, the BoA has agreed to postpone for three months all loan repayments by individuals and businesses affected by the coronavirus outbreak.
Last week, the government unveiled a financial assistance plan worth 370 million U.S. dollars to aid the health sector, businesses and the needy.