Fullani: Albanians’ Euro panic hurried

TIRANA, Dec. 20 – Central bank governor has described panic among Albanians fearing the future of the Euro as the Eurozone debt crisis escalates as premature and hurried. 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.
On Wednesday this week, the Euro stood at 138.42 lek, according to the Bank of Albania official exchange rate.
“Normally, the news coming from Europe of problems with the single currency created a tense situation in the system, which was followed by a self-correction process of the market, bringing it to normality,” said Governor of the Bank of Albania, Ardian Fullani.
Fullani, who has been recently re-elected for a second consecutive seven-year term as Bank of Albania governor advised citizens to consult banks before undertaking hurried actions such as those fluctuating the exchange rate in the first week of Dec. when Euro dropped by 4 lek against lek.
“It’s not time to take positions, it’s not the appropriate time to convert your currency, because this time’s news was understood this way, or other news might bring another novelty. Before accessing information or making a move with your money, you should immediately consult professionals, you should consult your bank,” advised Fullani.
Fear of the Eurozone debt crisis putting the existence of the single currency at stake was quickly reflected on the Albanian exchange rate with Euro losing considerable ground against the Albanian national currency, lek in the first week of December. After remaining at record highs, above 140 lek, from March to November 2011, the Euro dropped to a record low of 136 lek and now stands at an average of 138 lek.
The European currency had not been as low as 136.31 lek since August 2010, when it was at an average of 136.24 lek.
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 an constant appreciation trend against Lek, climbing to a historically record high of 141.97 lek in June 2011 and to 140.97 lek in November 2011.
Financial experts explain the appreciation of lek against the Euro during the first days of this month with a psychological impact from the troubled euro, leading Albanians to switch their deposits from Euro to lek and business demand for Euro on a falling trend.
If the depreciation of Euro continues, it will favour borrowers of Euro-denominated loans, paid in lek, who have been losing considerable during the past 3 years.
Domestic producers importing raw material for manufacturing will also be slightly favoured while Albanian exports, whose majority of more than 60 percent is destined for EU, will be depreciated.