Nonetheless, competitiveness indicators for the Albanian economy reveal that there is a lot more to be done in this regard, to face competition both in the region and globally. The Bank of Albania is committed to maintaining monetary and financial stability through: a) A prudent monetary policy. We have ensured price stability, complied with the inflation target and anchored long-term expectations of the economy. This move has increased the space for harmonising better the short-term stimulation with the long-term stability of the economy. In response to shocks, we have progressively eased the monetary policy since 2009. This approach has brought the key interest rates to their record low to boost consumption and investments. The depreciation of the nominal and real exchange rate has provided another incentive for the Albanian economy, encouraging exports and discouraging imports. We have continuously adjusted our monetary operations to guarantee an increasing supply of liquidity against an expanded collateral base with longer maturity terms. Given the current situation of the Albanian economy, we believe that macroeconomic policies should continue to be stimulating even in the future. The need for stimulating economic policies is conditioned first by the fact that the Albanian economy is operating below its potential, as the demand may not guarantee a complete utilisation of capacities. Second, it is enabled by short and medium-term controlled risks to economic stability. In the context of harmonisation of fiscal and monetary policies, the Bank of Albania has supported the increasing orientation of the fiscal policy towards debt consolidation.
There is also a risk that large imbalances in world trade and low employment in Europe will trigger protectionism, which could reduce growth capacity even further. A pronounced slowdown in growth in the entire OECD area is also likely to lead to markedly slower growth in China and emerging economies in Asia because exports are an important driving force behind growth in the region. This could lead to an appreciable fall in prices for oil and other commodities and weak developments in the shipping industry. Just as Norway has benefited strongly from the sharp international upswing in recent years, the Norwegian economy could be affected by such a downturn. The recent change in China’s exchange rate regime and the revaluation of the Chinese currency by 2 per cent will probably not cause substantial changes in the imbalances in world trade. At the same time, daily fluctuations of 0.3 percentage point between the yuan and the dollar are now possible. This allows for considerable variation and it cannot be ruled out that more pronounced changes in the same direction will gradually occur. So far, the Chinese authorities have maintained a stable course. It will probably be appropriate for both China and other Asian countries to shift more of their production towards domestic markets, which will reduce the large current account surpluses as well as curb the build-up of the official foreign exchange reserves. As part of this adjustment, the relative cost level will gradually increase.