Central banks decision reflects a better position of the banking sector. In its latest report, Bank of Albania said that compared to January last year, both deposits and loans grew moderately.
TIRANA, March 3 – Foreign-owned Albanian banks will now be able to resume normal operations if they want to transfer their profits to their mother banks abroad, after the country’s central banks lifted a ban set back in 2008.
Bank of Albania put the measure in place at the height of the financial crisis to protect Albania’s banking system from troubles abroad. The idea was to hold the money in Albania, where it could be invested, loaned or saved.
At its latest meeting, BoA’s Supervisory Council lifted the restriction, as the financial situation worldwide improved.
Some economic experts say lifting the ban would further diminish the supply of foreign currency in Albania, devaluing the lek.
Moderate growth in deposits and loans
But the central bank’s decision might reflect a better position of the banking sector, as both deposits and loans grew moderately this month.
In its latest report, the Bank of Albania said that compared to January last year, deposits at Albanian banks increased about 60 billion lek.
Having more money, banks moderately increased their loans as well. In January 2010 the total amount of loans issued by banks reached 445 billion lek. Compared with the same period of 2009, there was an increase of 42 billion lek.
The overwhelming majority of loans came from additional business loans in euros. Business has increased borrowing to cover its liquidity needs. Despite numerous demands by the Bank of Albania that the credit be given in leks, almost all credit given during January was in euros.
Bank of Albania has been pushing for loans to be in lek in order to protect the value of the local currency.
“Support your customers and continue lending to reliable borrowers, because it is helpful to your customers, to you and all of the economy. I am convinced that you have real opportunities to do so in competitive conditions, particularly for loans in the national currency,” BoA Governor Adrian Fullani told bank executives earlier this year.
