Lek loses ground against euro, USD

TIRANA, Sept. 10 – The end of the tourist season finds the Albanian national currency, lek, in a weaker position against Europe’s single currency, due to lower inflows of euros from Albanian migrants and tourists spending their summer holidays in Albania.
After dropping to below 139 lek in July and August 2014, the euro has regained ground against the Albanian lek in early September 2014 climbing to 140.31 lek, according to the Bank of Albania’s fixed exchange rate.
In August 2014, the Euro traded at an average of 139.31 lek, which was a record monthly low in the past two years.
The Albanian lek has also considerably depreciated against the U.S. dollar which climbed to 108.34 this week, up from an average of 101.35 lek last April, which is a record high for the past couple of years.
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.