Migrants’ arrival fails to strengthen national currency

TIRANA, August 7 – The arrival of migrants is failing to strengthen the Albanian national currency against the Euro. Bank of Albania data show the Albania lek has only slightly recovered against the common currency of the European Union in early August 2013. On Wednesday this week, the Euro traded at 139.92 lek, down only 0.4 lek compared to its average last July. Back in August 2012, the Euro traded at an average of 137.35 lek. Experts explain Lek’s failure to gain ground at this traditional period with migrants bringing less remittances from their crisis-hit host countries mainly Italy and Greece where more than one million Albanian migrants live and work.
The Albanian national currency has also gained ground against the US dollar which dropped to 105.44 lek this week, down from an average of 107.27 lek last July and 110.79 lek in August 2012, according to Bank of Albania data.
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.