Euro regains ground against lek

TIRANA, April 4 – After dropping to a record low of 136 lek in early December 2011, the Euro has regained ground against Albania’s national currency climbing to 140.24 lek this week, according to the Bank of Albania fixed exchange rate. The panic created from the escalation of the Eurozone crisis last December and news putting the continuation of the Euro in doubt has now been overcome as shown by the appreciation trend against lek in the past three months. The rush to convert Euro savings to Albanian national currency, lek, in early December 2011, put Euro at a one-year record low of 136 lek in the first days of this month.
However, three months on, the Euro has climbed from an average of 138.3 lek last December to 140.03 in March 2012.
The national currency, lek, has lost around 15 percent during the past 3 years against the Euro, the main currency used in real estate lending. The situation is especially difficult for those persons with income in lek and having to pay loan instalments in euro, which accounts for 60 percent of the total credit.
In November 2008, when the global crisis broke out Euro stood at an average of 123.29. Since then it has been on a constant appreciation trend against Lek, climbing to a historically record high of 141.97 lek in June 2011.
The effect of the exchange rate is another critical item within the portfolio of Albania’s external debt stock. In 2009 this effect was about 2.03 percent of the GDP. During the next years it was stabilized at 0.13 percent in 2010 and about 0.31 percent of the GDP in 2011, according to a Finance Ministry analysis.
The US dollars has also gained ground against Albanian lek over the past year climbing from an average of 100.17 lek in March 2011 to 105.97 lek in March 2012, according to BoA data.