It indicates that market movements around monetary policy meetings have been marginally smaller since we introduced our own interest rate forecasts in October 2005. Announcing the whole interest rate path has not resulted in more pronounced market reactions than before. Instead, the graph could be taken to mean that we have become somewhat more predictable overall. But other factors may also have contributed to smaller market movements: reduced volatility may also be related to the very low level of interest rates during recent years. [Chart: December 2013: Small market reactions after policy announcement] As I noted earlier, in a world of perfect and symmetric information, where the reaction pattern of the central bank is known to all, there would be no need for forward guidance. Agents would not pay any attention to our forecasts, as these would already be internalised in expectations and reflected in asset prices. But it is also the case in the real world that the better we are at communicating our reaction pattern, the less attention our forward guidance will receive. For this reason, it will be hard to identify the contribution of publishing the interest rate forecast. This chart shows a typical example of an announcement where our new path had been anticipated. The market interest rate path prior to our meeting in December last year (blue dashed line) was already well aligned with the new interest rate path to be published (the purple solid line).
Ardian Fullani: Economic and monetary developments in Albania in 2010 Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the Parliament presenting the Annual Report of the Bank of Albania, Tirana, 9 June 2011. *  *  *  Dear Madam Speaker, Dear Members of Parliament, It is a pleasure for me to be here today to present the Bank of Albania’s opinion on economic and monetary developments of the past year. Pursuant to legal requirements and our institutional commitments to enhancing the central bank’s transparency and responsibility, in this presentation I will share with you the main highlights on Bank of Albania’s activity over 2010. This activity, in its entire spectrum, aimed to fulfil our mission and legal obligations, and reflect the Parliament’s recommendations for 2010. Let me begin my presentation with a brief overview of our conclusions. During 2010, the Albanian economy experienced an overall positive performance. The economic activity posted growth, while the macroeconomic stability and financial health indicators improved. Economic growth reflected mainly the foreign demand for Albanian products and services, affirming, above all, the dynamism of our private sector. It was also supported by a sustained macroeconomic environment, with downward risk premia and improved liquidity indicators. In particular, reflecting developments in the financial and real sector of the economy, as well as our monetary policy, consumer price inflation remained in line with our 2010 target.