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Euro deposits fell by 0.4% during the first quarter of the year

Politiko 2025-05-09 18:17:43

Euro deposits fell by 0.4% during the first quarter of the year

The growth of bank deposits in Euro has slowed down in the first quarter of this year. According to the Bank of Albania's statistics, at the end of March, deposits in the European currency were worth EUR 8.01 billion, down by 0.4% compared to the end of the previous year. Euro deposits recorded a temporary increase in January, reaching 8.08 billion euros, but then declined for two consecutive months in February and March.

Currently, deposits in Euro are recording the lowest value since November last year. Deposits in the European currency, however, remain growing annually, by 8.5% compared to March last year. However, their growth rates have been reduced and have dropped to single-digit levels. The decline in Euro deposits during the first quarter of the year, however, came from only one segment of customers, that of businesses. Business deposits fell by almost 140 million euros or more than 8% during the first quarter of the year.

Meanwhile, household deposits, which constitute the dominant part of deposits in the European currency, have continued to maintain a slight upward trend. In the period 2021-2024, bank deposits in Euro grew at double-digit rates, reflecting the high foreign exchange flows in the Albanian economy. According to the Bank of Albania, these flows are mainly due to tourism and foreign direct investments.

However, the first quarter of this year seems to have curbed this continuous upward trend for the time being. This may be a signal of the slowdown of foreign exchange flows in the economy and also coincides with the significant reduction in the growth rates of foreign nationals' inflows during the first quarter of the year.

However, the curbing of the growth of deposits in Euro for the time being has not led to major movements in the exchange rate. During the first quarter of the year, the Euro remained below the limit at 100 Lek, marking only a small upward correction, after it had fallen near the 98 Lek limit at the end of 2024.

Meanwhile, bank deposits in their total continued to grow in the first quarter of the year. According to the Bank of Albania, they reached the value of ALL 1.72 trillion, up by 2.2% or about ALL 38 billion since the beginning of the year. The growth in the first quarter of the year was mainly supported by deposits in the local currency./ Monitor

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