Beach weekend and match with Serbia lower Euro exchange rate below 98 lek again

The Euro-Lek exchange rate started the week with a decline and reached a new historical minimum.

According to the official exchange rate of the Bank of Albania, the European currency was exchanged on Monday at 97.93 lekë, the lowest level ever recorded.

Foreign exchange agents believe that the Euro's decline is related to the large foreign exchange inflows exchanged over the weekend.

Last weekend brought a high influx of foreign visitors, mainly from neighboring countries.

With the start of the summer season and the increase in temperatures, the flow of visitors to the Albanian coast during the weekends has also begun to increase.

Also, an additional impact is estimated to have been the Albania-Serbia football match, which brought a large number of visitors from Kosovo to our country.

In fact, the decline in the exchange rate occurred mainly during the weekend, including Friday, which was an official holiday. In fact, on weekend days the average rate was even lower, as foreign exchange offices applied an even lower rate when purchasing foreign currency.

On Monday, the buying rate marked an upward correction, but the weekend trend was still reflected in the official rate, at a new historical minimum.

This year too, the Euro-Lek exchange rate is showing a downward trend again, starting from the second quarter of the year. Agents believe that these pressures will be present throughout the summer.

Such a trend was clearly observed last year, when the Bank of Albania intervened by making large purchases of foreign exchange to prevent the Lek from further strengthening. The Central Bank bought approximately 933 million euros in the domestic foreign exchange market in 2024, at the highest historical value.

Market sources indicate that the Bank of Albania resumed purchases in May and is expected to continue them through the summer months. As long as inflation is below the 3% target, the Bank of Albania's intervention can be justified from this perspective.

However, in recent months, a slight upward trend in inflation has been observed, reaching 2.3% in April. A good portion of consumer goods appear to be becoming more expensive again, and the increasing demand generated by the tourist season may continue to drive up prices.

In such a scenario, the scope for the Bank of Albania to curb the further decline in the Euro exchange rate may be smaller./ Monitor