Lek loses ground against Euro, USD

TIRANA, March 20 – The Albanian national currency, lek, continues losing ground against the two main foreign currencies, the Euro and the US dollar in the beginning of this year. Although depreciating in international markets because of the escalating crisis in Cyprus, the Euro continues gaining ground against the Albanian lek because of rising demand for euro in the domestic market.
“The main cause is related to commercial banks buying euro in the domestic market for their own needs. This has considerably increased demand for euro which is strongly felt in a small market as Albania,” say exchange rate experts.
The Euro traded at 139.95 lek this week, 0.2 lek higher than its average last February while the US dollar rose to 108.26 lek, up 3.65 lek compared to its average last February.
The common currency of the European Union rose to 139.75 lek in February 2013 up from 139.49 lek last January and 139.35 in February 2012, according to the fixed central bank exchange rate. Meanwhile, the US dollar dropped to 104.61 lek in February 2013, down from 104.96 in January 2013 and 105.32 in February 2012.
After dropping to as low as 136.5 lek last July, the Euro has regained ground against the Albanian national currency, lek in September 2012. This week the single European currency was trading at 139.13 lek, almost 3 lek higher compared to a few weeks ago when migrants’ arrival and lower trade exchanges with Eurozone countries had considerably weakened the Euro.
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 are already suffering from poor demand in Italy and Greece.
The national currency, lek, has lost around 15 percent during the past 3 years against the Euro, the main currency used in real estate lending. In November 2008, when the global crisis broke out Euro stood at an average of 123.29. Since then it has been on a constant appreciation trend against Lek, climbing to a historically record high of 141.97 lek in June 2011.
Meanwhile, the US dollar continues appreciating against the Albanian lek climbing from an average of 10.65 lek in February 2009 to 104.61 lek in February 2013.