Devaluation of LEK makes lek-denominated loans attractive

TIRANA, Feb.20 – Remittances and services offered in foreign exchange have made the local currency go down in value steadily. The convenience of conducting daily operations in local currency coupled with the low relative value has made lek-denominated loans the favorite leverage option for Albanians. The Albanian currency is also very stable because it is strictly under the low inflationary control procedures of the central bank. Foreign currency loans have extra expenses of exchange rate related adjustments. BoA has recently criticized second level banks for their ambiguous reporting of interest values. According to Boa frequently banks report the nominal and not the real interest rate which should be adjusted for exchange rate fluctuations.