- Decision
- Maintain
- Rate change
- 0 bps
- base interest rate
- 2.5%
The Supervisory Council of the Bank of Albania on 6 August 2025 kept the policy stance unchanged, leaving the base interest rate at 2.50 %, the overnight deposit rate at 1.50 % and the overnight lending facility rate at 3.50 % after reviewing economic and monetary developments and the outlook. This hold comes after a 25 bp cut in July that lowered the base rate from 2.75 % to 2.50 %. The decision maintains the existing interest-rate corridor, and the statement offered no new data or guidance beyond reaffirming the current monetary policy settings.
Rate evolution
From July 2025 to August 2026, the Bank of Albania cut the policy rate by 25 basis points to 2.50% and then left it unchanged, including at its 5 August 2026 meeting. Through May, the pause was framed against economic growth, rising employment and wages, credit expansion and calm financial markets, while inflation stayed below the 3% target despite a mild pickup, as low imported inflation and exchange-rate appreciation offset firmer domestic pressures concentrated in rents.
In November 2025, the Bank judged the stance appropriate because inflation was expected to return to target in the first half of 2026, with risks seen as balanced between downside risks from trade and geopolitical tensions and upside pressure from labour shortages and rapid wage growth. By March 2026, and with the rate unchanged again in May, uncertainty was presented as more acute and externally driven, centered on the Middle East conflict and oil prices, and holding steady was seen as supporting a return to target during 2026 absent strong supply shocks. In August, the Bank judged the stance remained appropriate as second-quarter inflation averaged 3.0%, reflecting higher international oil prices and stable demand, while projections showed inflation slightly above target in the short term before gradually returning towards it and risks remained tilted towards higher inflation and weaker growth.