FX.co ★ Albania Cuts Policy Rate to 2.5%

Albania's central bank made a strategic decision at its July 2 meeting to lower the benchmark interest rate by 25 basis points, adjusting it to 2.5%. This decision broke a pattern of four consecutive meetings where the rates had remained unchanged. Similarly, the central bank reduced the overnight lending and deposit rates by 25 basis points, bringing them to 3.5% and 1.5%, respectively. This adjustment was prompted by a modest decline in headline inflation, which eased to 2.2% in May from 2.3% in April. This decline was largely due to slower price increases in sectors such as food and beverages, alcohol and tobacco, clothing and footwear, as well as miscellaneous goods and services. However, it is noteworthy that GDP growth decelerated to 3.4% year-on-year in the first quarter of 2025, marking the slowest expansion since the fourth quarter of 2023.