Bank of Albania: Lek is showing some muscle

Tirana, June 24. According to the Bank of Albania, the Albanian currency, the Lek, is expected to strengthen compared to the US dollar and Euro during the next three months. Usually, the Albanian Lek appreciates during the June to September period because of the beginning of the tourist season and the large influx of foreign currency brought into the country by Albanian emigrants. Normally, as Albanian emigrants return home for vacations and exchange foreign currency, the value of the Lek increases along with its demand.
The Albanian currency has appreciated, compared to foreign currencies such as the U.S. dollar and Euro, during 2007. This appreciation has helped curb the increase in oil and food prices in the Albanian market. The Bank of Albania noted in its report that this trend is continuing during the first quarter of 2008. Therefore, the real exchange rate has increased by 4.5 percentage points compared to the first quarter of 2007. In the first quarter of 2007, the real exchange rate increased by only 0.1 percentage point compared to the first quarter of 2006. The appreciating Albanian currency is an indicator of Albanian macroeconomic stability and lower inflation compared to other countries in the region and the country’s main trading partners. Compared to one year ago, the Albanian Lek has appreciated 21 percent compared to the U.S. dollar. One U.S. dollar is, today, worth with ALL 78.29. During the same period, the Albanian Lek has appreciated by just 0.49 percent, and one Euro is now worth ALL 123.25. However, the Bank of Albania is not entirely satisfied as fluctuations in the exchange rates were larger than expected during 2007 and the first quarter of 2008. (Tirana Times Staff)