The Bank of Albania has bought 272 million euros only for the first 6 months

2024-09-29 09:40:00, Ekonomi CNA

The Bank of Albania has bought almost 272 million euros in the foreign exchange market in the first half of this year alone.

According to the information published by the Central Bank, for the first 6 months, a total of 134.2 million euros were purchased in the auctions planned for the needs of the foreign exchange reserve, while even more, 137.6 million euros, were purchased through direct operations, in order to avoid further strengthening of the lek in the foreign exchange rate.

The Bank of Albania started these operations in May, argued mainly with the objective of price stability. Throughout 2024, inflation remained below the 3% target, while in August it dropped to 2%, the lowest in the last three years.

The amounts purchased are significant, especially if we consider that the direct purchases to curb the strengthening of the lek were purchased only in the two-month period, May-June 2024 (respectively, 80.4 million euros in May and 57.2 million euros in June). It is clear that in the absence of these interventions, the euro-lek exchange rate would have fallen to even lower levels.

The interventions of the Bank of Albania in the market to keep the exchange rate of the euro above the level of 100 lek continued during the month of July, while they were stopped only on August 2.

Exactly after this moment, the exchange rate of the euro slipped below the value of 100 lek. The decline continued throughout the month of September. The euro-lek exchange rate closed last week at the level of 98.84 lek, the lowest of all time.

The Bank of Albania has bought 272 million euros only for the first 6 months

Despite the fact that the exchange rate has fallen below the level of 100 lek, as expected, the Bank of Albania has assessed that the volatility of the exchange rate (in this case the fall) has not been very strong and worrying. For this reason, the Central Bank has decided that an intervention in the exchange rate, for the moment, is no longer necessary.

However, the downward pressure on the euro has clearly continued even after the end of the summer. This proves that the abundant foreign exchange flows are no longer associated only with the peak period of the summer season.

Tourism seems to be spread over the other months of the year, while foreign investments in the real estate market continue to grow. Foreign direct investments in real estate for the 6th month of 2024 reached the value of 181 million euros, increasing by 43% compared to the 6th month of 2023.

During the year 2024, with the objective of increasing the foreign exchange reserve, the Bank of Albania intends to purchase through auctions the amount of 250-330 million euros.

For this purpose alone, 134 million euros were purchased in the first half of the year, with an increase of 15% compared to the same period of the previous year; if we also add direct purchases to influence the exchange rate, the anticipated range of purchases to be purchased in the domestic foreign exchange market has already been reached in the first half of the year.