TIRANA, Nov. 17 – The Albanian national currency, lek, lost considerable ground against both the Euro and the US dollar this week hitting record lows for this year.
Bank of Albania’s official exchange rate data on Wednesday showed euro climbed to 139.3 lek while the US dollar to 103 lek. Both of the main two foreign currencies climbed by an average of 3 lek during the past week.
Finance Ministry data show lek depreciated by 8 percent against the US dollar year-on-year during the January-August period in 2010 and lost 5.9 percent against the Euro.
Meanwhile, last August when dozens of thousands of immigrants came home to spend their summer holidays, Lek appreciated by 1 percent against the US dollar but remained at almost the same levels against the European currency.
A stable exchange rate after the 2009 shock, when the national currency, lek, lost 7.5 percent against Euro and 13.2 percent against the US dollar, and the inflation rate in check, have also had their positive impacts in the positive economic growth Albania registered during the first half of this year, says the Finance Ministry.
Meanwhile, a central bank monetary policy report shows lek appreciated by 0.57 percent against the euro and 2.23 percent against the US dollar during the third quarter of 2010. The appreciation against the US dollar was a reflection of the international markets in the third quarter when the dollar lost 1.6 percent against Euro compared to the second quarter.
Meanwhile, the seasonal strengthening of Lek against Euro reached its highest rate in July when Euro hit a low of 134.86 lek for the first time since October 2009.
Konfindustria’s warning
Few weeks ago, Albania’s business community represented by Konfindustria warned that The European Commission’s decision to grant Albania visa-free travel in mid-December 2010 could bring a considerable depreciation of the Albanian currency, lek, against Euro.
Worried that thousands Albanians could temporarily leave the country to visit friends and family or travel as tourists, Konfindustria said that the visa-liberalization will drive considerable amounts of money out of the country, affecting the national currency which has been losing considerable ground to the European currency in the past two years.
According to Konfindustria, the only solution to this expected situation for the Albanian government is to accelerate the implementation of a full tax amnesty reform by the end of this year, making use of the immigrants’ return to spend their year-end holidays as the best way to be successful in this effort.
