The objective set by the European central banks to reduce the level of inflation below 3 percent within the next year, is not achievable.
So says a report of the Organization for Economic Cooperation and Development, OECD. The organization says that central banks will have to maintain high interest rates at least for the next two years, to reduce inflation to the set target.
The Bank of Albania, which a few weeks ago raised the interest rate to 3.25 percent, has set a target to reduce inflation below 3 percent at least until the second half of next year.
Inflation in Albania is led by food, while in European countries by energy and construction.
The restrictive policies of the Bank of Albania directly affect the cost of loans for citizens and businesses. However, the wide spread of the euro in the Albanian economy limits the effects of the monetary policy of the Bank of Albania to the national currency only.
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