In terms of analysis by socio-demographic groups, the survey results show that the monetary value in “old lek” is more frequently used by: (i) males; (ii) old-aged people; (iii) persons with a low-education level; (iv) unemployed persons in labour market; and (v) individuals with a low level of family income. These groups identified in the survey will be the focus in the projects of this awareness campaign for bringing to an end the use of the wrong term “old lek”. Against this backdrop, the Bank of Albania is launching this awareness campaign, which will extend in time and will aim at being a comprehensive one, affecting various groups of interest. In a medium-term period, and through various channels, we aim at knocking at the doors of every Albanian to uproot the terms “new” or “old”, by avoiding the confusion in the communication of prices and enhancing the correct reading of economic and financial indicators. Lek is the national currency in Albania, and the face value of each coin or banknote is the one written on it. Nevertheless, the fact that this incorrect use is inherited in the day-to-day speaking and has been resistant for more than 55 years, illustrates that the sporadic and isolated efforts of a solely institution to rectify this phenomenon are insufficient. A joint and coordinated commitment among central institutions of the country, media and other relevant actors is crucial in this regard.
Inflation expectations are fundamental to the process of interest rate determination and low inflation expectations are entrenched not only by the implementation of appropriate monetary and fiscal policies at any given time, but also by past inflation developments. Low inflation expectations were becoming entrenched in 2008 following two consecutive years of single digit inflation in 2006 and 2007. However, towards the end of 2008, the increase in food prices and the impact of the global financial crisis caused inflation to increase to a double digit figure of 16.6%. In spite of this, the prospects for low inflation, now look positive, creating an appropriate environment for interest rate reduction. Mr President, as you may have noticed from the newspapers in the recent days, a number of banks have reduced their lending base rates though not as much as we would like to see. We hope that this is just a start, and that banks will continue adjusting their rates downwards consistent with developments in other macroeconomic indicators. Distinguished Members, allow me to comment on the statutory instrument regarding the $ over the counter limit on deposits. These regulations are meant to encourage the use of the banking system in order to assist in curbing money laundering. Doing away with this would deprive the Central Bank of a mechanism for detecting fraudulent activities and create a healthy environment for money to be laundered in our financial system. Ladies and Gentlemen, the Bank of Zambia recognises the importance of long term finance for growth.