The Bank of Albania published Governor Gent Sejko’s address to the Assembly of the Republic of Albania presenting the central bank’s Annual Report for 2024, outlining a shift to a more accommodative monetary stance, active foreign-exchange purchases and a range of supervisory, macroprudential and payments initiatives aimed at maintaining price and financial stability. The report framed policy actions against 4% economic growth and average inflation of 2.2% in 2024, alongside improved external and fiscal positions. Monetary policy included two reductions in the key interest rate, taking it to 2.5% in July 2025 from 3.25% at the beginning of 2024, and nearly EUR 914 million of foreign-currency purchases in 2024 to moderate lek appreciation and limit volatility. On supervision and financial stability, the Bank cited banking system capitalisation of around 20% and a non-performing loan ratio close to 4%, and highlighted measures including revised rules for non-bank financial institutions and microcredit providers, a near threefold reduction in the maximum permissible effective interest rate on consumer loans, and a cap on penalty charges of 30% of unpaid instalments. It also referenced a new operational risk management regulation for banks, payment institutions and electronic money institutions based on revised Basel Committee standards, continued EU acquis alignment work, enhanced licensing and supervision requirements for foreign-exchange bureaus in 2025 focused on beneficial owners’ integrity, and macroprudential settings including a 2.5% capital conservation buffer for all banks and a first-time increase in the countercyclical capital buffer. On market infrastructure, the Bank noted Albania’s entry into the Single Euro Payments Area on 21 November 2024, with euro cross-border transfers for residents and businesses available from 7 October 2025, alongside ongoing work on an instant payments system, a TIPS Clone project and early-2025 initial open banking transactions, plus 2025 measures to reduce payment fees and commissions.
Bank of Albania 2025-10-31
Bank of Albania presents its 2024 annual report to Parliament highlighting rate cuts, FX interventions and tighter consumer loan protections
The Bank of Albania's 2024 Annual Report, presented by Governor Gent Sejko, outlines a shift to a more accommodative monetary policy, including interest rate cuts and significant foreign-exchange purchases to stabilize the lek. It highlights supervisory and macroprudential measures, such as revised rules for non-bank financial institutions, a cap on consumer loan interest rates, and enhanced foreign-exchange bureau supervision. Additionally, Albania's entry into the Single Euro Payments Area and developments in payment systems and open banking are noted.