2  BIS Review 103/2009  One important element of the ECB’s actions has been the non-standard measures I have described as “enhanced credit support”. 1 This support collectively defines the special and primarily bank-based measures to enhance the flow of credit over and above what could be achieved through policy interest rate reductions alone, and avoid a systemic liquidity threat. As you know, the ECB’s enhanced credit support comprises five elements: •  the full allotment of banks’ demands for central bank liquidity at fixed rates;  •  the further expansion of the list of assets accepted as collateral in our operations;  •  the lengthening of the maturity of our operations that now go up to one year;  •  the provision of liquidity in foreign currencies, notably US dollars; and  •  finally, direct purchases of covered bank bonds in order to revive this market segment, which is important in Europe. Let me briefly recall the rationale underlying these five specific measures. The first motivation for introducing enhanced credit support was to address the seizing up of the money market. If left unaddressed, this seizing up would have rendered the refinancing of many bank assets impossible, risking a massive and disorderly deleveraging by credit institutions. This, in turn, would have seriously hampered the monetary policy transmission mechanism and ultimately curtailed the expansion of credit to firms and households in the euro area. The core of the measures that we introduced in October was the “fixed-rate fullallotment” tender procedure.
In 2022, inflation rose initially on the back of the rapid surge in prices of import items, in addition to an ever increasingly strong aggregate demand and an overall upswing in costs of production. However, inflation trend recorded a turning point in October 2022, declining progressively onwards at 4.7% in May 2023. This performance reflected the dynamics of prices in global markets, the first effects of our monetary policy's reaction, - which I will elaborate on in more detail below, - and the appreciation of the exchange rate. Also, the relatively low inflation rate in Albania was also backed by the contained electricity prices for households and some businesses, thus transferring the increased cost in energy imports to the public sector's balance sheets. Year 2022 marked progress in terms of improving the external position of Albania as well. More specifically, the Albanian exports grew by 42% over the past year, driven by the rapid growth in tourism income. This growth led to the reduction in both the trade deficit and the current account deficit. In parallel, external debt of Albania declined while its sustainability indicators improved. The improvement in the balance of external trade, the high levels of foreign direct investments coupled with the stability of the domestic financial markets, drove to the strengthening of the lek exchange rate during the past year. These trends seem to have continued in 2023 as well.