U.S. dollar hits 12-year high against lek, euro

Tirana Times
By Tirana Times March 13, 2015 10:14

U.S. dollar hits 12-year high against lek, euro

Story Highlights

  • The sharp depreciation against the US dollar since mid-2014 has had negative impacts on several Albanian imports making them more expensive or failing to reflect sharp cuts in international markets such as fuel prices which have almost halved in the past eight months

TIRANA, March 11 - The U.S. dollar hit a new 12-year high against the Albanian lek this week but remained unchanged to the European single currency, making several key imports in Albania much more expensive as the Albanian national currency has lost around 27 percent against the dollar since its continuous upward trend mid-2014.

With international oil prices having more than halved since their peak level in mid-2014, the U.S. dollar rose to 130.46 lek this week, up from an average of 123.46 lek last February and an average of 131.66 lek back in January 2003.

The situation was the same for Europe's single currency which plunged to a 12-year low against the U.S. dollar. The euro traded at $1.0638 this week, its weakest since April 2003, losing around 25 percent since May 2014.

The Albanian national currency also slightly depreciated against the Euro this week when it traded at 140.4 lek, up from an average of 140.13 lek in the first two months of this year.

The sharp depreciation against the U.S. dollar since mid-2014 has had negative impacts on several Albanian imports making them more expensive or failing to reflect sharp cuts in international markets such as fuel prices which have almost halved in the past eight months.

The sharp depreciation of the national currency has also had an impact in credit as US dollar denominated loans account for around 10 percent of the total loans to businesses and a negligible 1.2 in loans to households, making repayment for those who have their income in the Albanian currency much more expensive.

Central bank data shows around 63 percent of business loans are in foreign currency of which 87.2 percent in euro and 12.8 percent in U.S. dollar.

The national currency, lek, has lost around 15 percent during the past six years against the Euro, the main currency used in real estate lending. In November 2008, when the global crisis broke out, the Euro stood at an average of 123.29. Since then, it has been on a constant appreciation.

 

Tirana Times
By Tirana Times March 13, 2015 10:14