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Albanians do not manage to save in Lek, but only in foreign currency

Politiko 2023-02-03 15:39:19

Albanians do not manage to save in Lek, but only in foreign currency

The total deposits that families, individuals, businesses and public institutions had in banks reached 1.28 trillion ALL at the end of 2022, or almost 11 billion ALL, according to statistics published by the Bank of Albania.

Compared to the previous year, savings in the system increased by 5%, reaching 5551 billion ALL. These are the lowest growth rates since 2019.

The value of deposits increased by 61 billion ALL in 2022, from 103 billion ALL that they had added in 2021.

The slowdown is mainly related to the weak performance of savings in Lek, while the growth has been entirely led by foreign currency.

According to the Bank of Albania, deposits in Lek were almost at the same level as in 2021, with a slight contraction of 640 million Lek (-0.1%).

This is the most negative performance since 2019. especially during the pandemic year, savings in local currency increased, being mainly influenced by the inability to spend, as a result of movement restrictions.

The trend was positive in 2021 as well, while in 2022, high prices seem to have affected the ability of families and individuals to save, although in the second half of the year deposit interest rates were more favorable, due to the tightening of the monetary policy of the Bank of Albania.

Time deposits of individuals in Lek fell by 6% in 2022, being the main factor that influenced this poor performance. Another reason is related to the temptation to invest in treasury bonds, due to the high rate increase, which caused the savings to move from deposits to government securities.

In contrast, foreign currency savings have continued to grow strongly. The stock of foreign currency deposits reached a record of 725 billion ALL, increasing significantly by 9.3%.

This performance was influenced both by the savings of businesses and individuals. (The expansion could be even stronger, if the exchange rate effect is stripped out, as deposits are reported in lek, while the euro depreciated significantly in 2022).

As a result of the strong growth, at the end of 2022, foreign currency deposits accounted for 56.8% of the total at the end of 2022, from 54.6% a year ago./ Monitor

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