Lek further strengthens against Euro

TIRANA, July 22 – With dozens of thousands of tourists and migrants already visiting Albania during the tourist season, the Albanian national currency has further strengthened against Europe’s single currency due to larger inflows of euro and rising demand for lek. Bank of Albania data published this week show the Euro dropped to a record low of 138.94, down from 139.51 lek a couple of weeks ago and an average of 140 lek during the past year.
Experts expect lek to continue gaining a slight advantage against the Euro even in August when dozens of thousands of migrants, mainly from Italy and Greece, the hosts of around 1 million Albanian migrants, come home bringing remittances, which since the onset of the global financial crisis have been on a continuous downward trend.
Bank of Albania data show the Albanian lek has historically gained ground against the Euro in July and August but immediately depreciates in September when the tourist season is over and migrants leave.
The national currency, lek, has lost around 15 percent during the past five years against the Euro, the main currency used in real estate lending. In November 2008, when the global crisis broke out, the Euro stood at an average of 123.29. Since then, it has been on a constant appreciation trend against Lek, climbing to a historic record high of 141.97 lek in June 2011 and remaining at an average of 140 lek since then.
The appreciation of the Euro against the Albanian lek is bad news for borrowers in Euro who have their income in lek and government’s external debt payments but good news for Albanian exporters who have been affected by Eurozone spillover impacts.
Differently from loans, 60 percent of which are issued in foreign currency, mainly in Euro, the situation with deposits appears more balanced with lek deposits accounting for 52 percent of total.