TIRANA, Dec.25- The holiday season has drawn tens of thousands of immigrants back home, supplying the Albanian currency market with great quantities of foreign currency, mainly euros. Hence the prices of foreign currencies have fallen, strengthening the lek. The euro is now traded at 120.1 lek. The effect of remittances brought home by immigrants is very important because it alleviates poverty and finances the foreign trade deficit. Two thirds of the trade deficit in Albania during the last three quarters has been finance by remittances. The banking sector is also competing for the money brought by immigrants, launching several promotions by banks with attractive deposit programs. Indeed, figures indicate 41 percent of monthly revenues for Albanian households are generated by remittances. Studies show that 59 percent of beneficiaries of these remittances are rural families whose poverty levels are generally higher than people living in cities. The use of this money is usually consumption, though some investment to sustain small business activities also occurs. The latter needs to be prioritized because all studies show that remittances fall after a medium term of time when immigrants settle in their life abroad.
Another problem is that immigration can also cause a loss of less expensive labor and, hence, hurt the chances of Albania attracting foreign investment.
