The Effectiveness of the Albanian Monetary Policy
The Effectiveness of the Albanian Monetary Policy

Author(s): Evis Kumi
Subject(s): Economic policy, Financial Markets
Published by: Udruženje ekonomista i menadžera Balkana
Keywords: Monetary policy; Price stability; Economic growth; Interest rates
Summary/Abstract: This article aims to assess the efficiency of the Bank of Albania’s monetary policy in attaining its goals of price stability and economic expansion. Price stability is essential for ensuring a favorable business environment, preserving the purchasing power of the currency, and reducing uncertainty in the economy. The analysis takes into account the unique characteristics and challenges faced by the Albanian economy. This article offers insights into the effectiveness of the monetary policy framework in Albania by assessing the primary instruments and tactics used by the BoA, including interest rates, reserve requirements, and open market operations. It also investigates how external influences affect the efficacy of monetary policy and makes suggestions for improvement. This paper concludes with suggestions for boosting the Albanian monetary policy’s efficacy. It recommends actions to strengthen the transmission mechanism, improve data quality and availability, enhance coordination between monetary and fiscal policies, and boost the institutional capability of the central bank. It also stresses how crucial it is to have a consistent and well-defined policy framework. In the end, this article provides recommendations for enhancing the effectiveness of the Albanian monetary policy. It suggests measures to strengthen the transmission mechanism, improve data quality and availability, enhance coordination between monetary and fiscal policies, and increase the central bank’s institutional capacity. Additionally, it emphasizes the importance of maintaining a stable and predictable policy framework.

• Details
• Contents