TIRANA, April 16 – Albania and China have renewed their local currency swap deal with China for another three years in a bid to further promote trade and investment ties between the two countries.
The renewed three-year deal allows the Albanian and Chinese central banks to swap two billion yuan for 34.2 billion lek (€264 mln/US$325.6 mln) in an agreement that benefits growing trade and investment links between the two countries as China has emerged as Albania’s third largest trading partner and one of the top foreign investors in the country.
The agreement first signed in 2013 allows Albania’s banking system to use the yuan funds to support market operators boost trade and financial cooperation.
In addition to promoting bilateral trade and foreign direct investment, the deal also targets supporting financial stability in the country in case market conditions dictate the need for such liquidity, Albania’s central bank said in a statement.
Back in 2014, Albania’s then-central bank governor Ardian Fullani said the Albanian government could use the deal to tap new financial markets and diversify its external borrowing. Albania currently has no external debt in China’s national currency, yuan.
Albania’s public debt is currently at 70 percent of the GDP, a high level for Albania’s current stage of development and posing a key threat to the country’s macro-economic stability.
Chinese companies acquired in 2016 two of Albania’s most important assets, the country’s sole international airport and the largest oil company, turning China, the world’s second largest economy, into one of top investors in a single year.
Albania has also lifted visas for Chinese tourists this year under a visa waiver program that is expected to have a major impact on the attraction of one of the world’s fastest growing source of tourists.
An entire generation of Chinese people who grew up with Albanian movies for about two decades until the late 1970s when the two countries were key allies and have now retired are the most likely segment to visit Albania, considering their nostalgia for Albania.
