The lek started October strong as well, the euro exchange rate close to historical lows

2024-10-09 08:10:05, Aktualitet CNA

The lek started October strong as well, the euro exchange rate close to

The lek is maintaining strong positions in the foreign exchange rate even in the first part of October.

According to the official exchange rate of the Bank of Albania, the euro was exchanged on Tuesday at 98.78 lek, very close to the historical minimum level of 98.77 lek that was recorded on September 30.

The strengthening against the euro is keeping the lek in a favorable position even in relation to most other currencies. After passing the limit of 90 lek on Monday, the US dollar fell again on Tuesday, at the level of 89.88 lek. The US currency is near 15-year lows.

According to exchange agents, the market continues to be characterized by a stable supply of the European currency. The end of the summer season has not brought about an upward correction of the exchange rate. In part, the lack of an upward correction can also be explained by the interventions of the Bank of Albania, which from May until the beginning of August artificially kept the exchange rate above the level of 100 lek.

The lek started October strong as well, the euro exchange rate close to

Only in the first half of this year, the Bank of Albania has bought almost 272 million euros in the foreign exchange market, of which 134.2 million euros in the auctions planned for the needs of the foreign exchange reserve, while even more, 137.6 million euros, were bought with direct operations, in order to avoid further strengthening of the lek in the foreign exchange rate.

In the absence of these interventions, the euro exchange rate would most likely have touched lower levels during the period in question. After the withdrawal of the Bank of Albania, at the beginning of August, the exchange rate has remained below the limit of 100 ALL. On the other hand, this shows that the fall of the euro exchange rate is a phenomenon less related to the foreign exchange flows of the summer holidays. Foreign tourist visits and foreign exchange flows related to tourism are now more spread throughout the year.

However, the supply of foreign currency is not only related to tourism, but also to foreign investments, especially in real estate. For the first half of 2024, foreign direct investments in real estate reached the value of 181 million euros, increasing by 43% compared to the 6-month period of 2023.

The lek started October strong as well, the euro exchange rate close to

The total value of foreign direct investments for the period reached 749 million euros, the highest historical level ever recorded for this period of the year. The value of foreign direct investments increased by 8% compared to the same period of the previous year.

Even the tight supply of the lek continues to have a parallel effect on the strengthening of the local currency, especially due to the significant tightening of the fiscal policy in the last two years. For the 8th month of 2024, the budget surplus reached a new historical record for the period, in the amount of 58 billion ALL. The surplus has increased by 22% compared to the same period a year ago.

The strong lek continues to favor the reduction of the cost of importing goods and services in the Albanian economy. This translates into lower inflationary pressures from abroad and greater profits for importers of goods, while also making tourist trips for Albanians abroad cheaper.

The strong lek has brought opposite effects in terms of exports and in general in the performance of the productive sectors of the Albanian economy. Domestic production in the branches of industry has been in decline for five consecutive five-month periods, while for the 8th month of 2024, exports were in annual decline by 15%./ Monitor.al