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The Bank of Albania bought a record 249 million euros in foreign exchange auctions last year

2024-04-02 08:15:00, Ekonomi CNA

The Bank of Albania bought a record 249 million euros in foreign exchange

The Bank of Albania bought approximately 249 million euros in the domestic foreign exchange market last year.

According to official data reported by the central bank, the amount of currency purchased has increased by 75% compared to a year ago.

Only during the fourth quarter, a total of 66 million euros were bought in these auctions, which is very similar to the third quarter of the year.

Meanwhile, in addition to the purchases made in the planned auctions, last year the Bank of Albania carried out two interventions in the market through direct purchases, in order to prevent disturbances in the foreign exchange rate.

The Bank of Albania bought respectively five million euros on June 9 and 12.1 million euros on July 20, the day when the euro touched the historical minimum level in the exchange rate with the Lek.

Including the purchases that were intended to curb the further fall of the exchange rate, the Bank of Albania bought a total of 269.8 million euros during 2023.

According to the auction calendar, for 2024 the amount of purchases in the foreign exchange market is expected to increase further, in the range between 250 and 330 million euros.

For the year 2024, the Bank of Albania has predicted a total of 20 auctions for the purchase of foreign currency, between the months of February and December.

Half of the auctions will be in the spot form (with purchase on the day of the auction), while half will be of the one-month forward type (with purchase after one month, according to the exchange rate fixed on the date of the auction).

The Bank of Albania bought a record 249 million euros in foreign exchange

In the last three years, the Bank of Albania has applied forward auctions, as an attempt to promote the use of these agreements in interbank transactions and between private entities.

The increase in foreign exchange purchases by the Bank of Albania for the years 2023 and 2024 is also related to the unprecedented strengthening of the Lek in the foreign exchange rate and the need to somehow curb this strengthening. During the year 2023, the Euro-Lek exchange rate touched the historical minimum of 100.49 ALL, while the annual decline reached 14%.

According to the Bank of Albania, the strengthening of the Lek is especially related to the significant improvement of the Balance of Payments.

The current account deficit touched the lowest historical value for the past year, in the amount of 191 million euros, with a decrease of 78% compared to 2022.

Services and tourism in particular had the main effect on the historical narrowing of the current account deficit. The external account in services last year was positive in the amount of 3.4 billion euros, increasing by 43% compared to the previous year.

More than half of the surplus in services came from tourism. The statistics showed that the net income in the travel item of the Balance of Payments had the value of 1.84 billion euros, increasing by 72% compared to 2022.

In addition, the record value of foreign direct investments, of almost 1.5 billion euros, has exceeded by more than seven times the value of the current account deficit.

This shows that the foreign exchange flows entering the economy were greater than the outgoing ones./ Monitor.al