TIRANA, Sept. 5 – The end of the tourist season is slightly depreciating the Albanian national currency against Europe’s single currency which hit a six-year low against the Albanian lek last July, negatively affecting the country’s exports, two-thirds of which are destined for Eurozone countries.
The Euro slightly recovered to 137.54 lek on Monday following a six-year low of 135.87 lek in July 22 in gradual depreciation since late 2015 apparently fueled by the tourist season effects and lower demand for dominating euro loans as lending continues to remain at negative growth rates, according to the central bank.
In an annual summer trend, the Euro usually loses ground against the Albanian lek especially in July and August, the peak of the tourist season when dozens of thousands tourists and migrants visit Albania and the Euro turns into a common currency, triggering depreciation.
With the summer season almost over, the Euro is expected to further gain ground but little likely to reach the 140 lek level in the past four years.
The depreciation of the Euro against the Albanian lek is good news for borrowers in Euro who have their income in lek and government’s external debt payments, but bad news for Albanian exporters who are also facing a sharp cut in commodity prices, keeping exports at negative growth rates.
Albania faces high euroization rates, with the single European currency accounting for more than half of total credit and being the main currency in the real estate market, which makes the central bank’s easier monetary policy little efficient.
Meanwhile, the national currency has been stable against the U.S. dollar for the past few months trading at 123 lek.
The U.S. dollar, whose weight in the Albanian economy and lending is much lower, hit a 12-year high against the Albanian lek and the Euro in March 2016 when oil prices fell to as low as $30 a barrel.
The British pound slightly climbed to 164.04 lek this week following a plunge since the Brexit referendum.
The British pound has lost about 9 percent against the Albanian currency since the June 23 Brexit vote but its weight on the Albanian banking system is quite small as deposits in British pound account for only 1.17 percent while credit in GBP is almost non-existent. The slight depreciation mostly contributes to a cut in migrant remittances from the UK, accounting for a considerable 11 percent of total remittances to the country, although Britain hosts only about 15,000 Albanian migrants compared to 1 million in neighboring Italy and Greece.
