Angelovska-Bezhoska: Central banks consistent in maintaining price stability
Skopje, 28 October 2022 (MIA) – National Bank Governor Anita Angelovska-Bezhoska alongside Vice-Governor Fadil Bajrami participated in the annual conference co-organized by the Bank of Albania and the London School of Economics and Political Science, which was held in Tirana.
Angelovska-Bezhoska pointed out that the continued growth of inflation is a phenomenon present in almost all economies in the world, which causes a rise in the level of inflationary expectations and creates risks for price stability. The situation is similar in the Western Balkan countries, which is why all central banks have already started a cycle of monetary tightening through adequate liquidity management, increasing interest rates, and depending on their monetary strategies, through the use of other instruments.
“In conditions where inflation growth largely results from supply factors, and adverse risks to demand are becoming more and more pronounced, it is necessary for central banks' steps to be careful and gradual. This will reduce damage to the economies, whose growth is already slowing down, amid high risks of the war in Ukraine and the energy crisis. At the same time, financial stability is protected in this way against greater risks. In any case, central banks continue to adhere to tightening of monetary conditions in order to maintain price stability,” said the National Bank Governor.
Angelovska-Bezhoska participated in a panel on the fight against inflation in developing countries in Europe, alongside Governor of the Bank of Albania Gent Sejko, Board member of the National Bank of Romania Csaba Bálint, and Vice-Governor of the National Bank of Hungary Barnabás Virág. Participants shared their experience in dealing with the persistent growth of inflation and the approach regarding policy normalization. Talks also discussed future challenges for central banks in the region and their response with the optimal combination of policies to achieve goals, the central bank said in a press release.
“Monetary-fiscal coordination is always a prerequisite for stability and prosperity, and it is particularly needed amid crisis. Faced with the energy crisis and the war in Ukraine, fiscal and monetary authorities are expected to once again contribute to overcoming the adverse effects on the economy. However, if monetary policy provided support for fiscal measures during the pandemic, amid these new crisis circumstances, fiscal measures should provide support for dealing with price pressures. At the same time, targeted support is needed for the most vulnerable categories, taking into account fiscal sustainability, particularly in the context of the rise in domestic interest rates and interest rates on international markets,” Angelovska-Bezhoska stressed.
The conference in Albania, this year held under the theme “Inflation is back: How to deal with it under heightened uncertainties?” included three sessions devoted to the nature of the underlying causes of the current rise in inflation and options for policy normalization, while keeping in mind the differences between advanced and developing economies. Participants highlighted specific challenges for the monetary policy, economic and financial stability of the countries in the region.
