Lek depreciates against Euro, USD

TIRANA, Nov. 17 – The Albanian national currency, lek, lost considerable ground against both the Euro and the US dollar this week hitting record lows during the past few years. Bank of Albania’s official exchange rate data on Tuesday showed euro climbed to 140.5 lek while the US dollar to 103.1 lek. Both of the main two foreign currencies climbed by an average of 3 lek during the past week.
Experts say the depreciation is temporary and is common during the beginning of the year when foreign companies operating in Albania transfer part of their profits to their countries of origin.
The increasing demand for euro considering following the liberalization of visas in mid-December has also affected the situation.
The appreciation of the European currency is mostly affecting people who have borrowed in Euro mainly to buy apartments which are sold in this currency but are paid in the national currency lek.
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.
The seasonal strengthening of Lek against Euro reached its highest rate last July when Euro hit a low of 134.86 lek for the first time since October 2009.
The central bank says the recent depreciation of Albania’s national currency, lek, against Euro and the US dollar is temporary and won’t affect the mid or long-term stability of the country’s exchange rate.
Governor Ardian Fullani says the mid and long term projection of the stability of lek had also taken into situation the new visa liberalization situation, which analysts say will further weaken lek against the two main hard currencies.
The central bank says the foreign currency inflows will remain balanced considering the country’s flexible exchange rate, the total liberalization of the capital and current account and the open economy. “The Bank of Albania is watching the situation very carefully to create the pre-conditions for a flexible demand and supply,” said Fullani.