Lek drops to record low against Euro

TIRANA, April 4 – The Albania national currency, lek, has reached a record low against the Euro but gained considerable ground against the US dollar. The central bank’s official exchange rate data on Wednesday showed the euro climbed to a record 141.16 lek up from 139.65 lek early last February, while the US dollar dropped to 98.8 lek, down from 103.84 lek in January 2011. Both of the main two foreign currencies had climbed by an average of 3 lek during the beginning of last February. Official central bank data show the Albanian Lek has depreciated by 7 percent during the past two years against the euro climbing to an average of 140.14 lek at the end of March 2011, compared to 130.67 at the end of March 2009. Meanwhile, the US dollar/lek exchange rate has remained stable.
Experts say the depreciation of lek 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 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.
The latest Bank of Albania monetary report showed the exchange rate for the national currency, lek, appeared stable in the last quarter of 2010, when it depreciated by only 0.54 percent against the main foreign currencies compared to 3.57 percent and 2.54 percent in the last quarters of 2008 and 2009. Lek lost more ground against the US dollar at 9.73 percent compared to 1 percent for the Euro in the last quarter of 2010 year-on-year.