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The exchange rate of the euro against the lek falls to a new historical low

Politiko 2024-09-12 15:11:20

The exchange rate of the euro against the lek falls to a new historical low

The exchange rate of the euro with the lek reached a new historical minimum on Thursday.

According to the official exchange rate of the Bank of Albania, the European currency was exchanged at 99.58 ALL, easily breaking the previous record of 99.6 ALL that was reached on August 20 of this year.

Since August, the Bank of Albania seems to have given up its efforts to keep the exchange rate above the 100 lek limit, and this has opened the way for market forces that continue to drag down the European currency.

According to exchange agents, currency flows in the market remain stable even after the summer season has passed its peak. This confirms that in recent years the dynamics of the exchange rate has changed and its decline is no longer related only to the seasonal effect.

One reason could be the time distribution of inbound tourism, which is now more concentrated only in the summer months. However, high foreign exchange inflows do not seem to be related only to tourism, but also to large foreign investments in real estate.

Until the middle of this year, statistics show an increase in the current account deficit, but on the other hand, a continuation of the increase in foreign direct investments.

In the second quarter, the current account deficit narrowed by 7.3% less compared to the same period last year. However, for the entire first 6 months, the current account deficit remains at the highest values ​​since 2020, with a total value of 575 million euros or 53% more compared to the same period last year.

For the entire first 6 months, the total value of foreign direct investments reached 749 million euros, also the highest historical level ever recorded for this period of the year. The value of foreign direct investments increased by 8% compared to the same period of the previous year.

According to the Bank of Albania, in the first half of this year approximately a quarter of the value of foreign direct investments went to real estate. The value of foreign direct investments exceeded the value of the current account deficit by 30%.

Meanwhile, the fiscal policy of the government continues to support the strengthening of the lek, shrinking the supply of local currency in the market. At the end of the 7th month, the budget surplus reached a record for the period, in the amount of ALL 55 billion, increasing by 22% compared to the 7th month of last year./ Monitor

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