Deposits in foreign currency fall significantly in February/ Decrease by 128 million euros, savings in Lek are also weak

2024-03-28 10:27:00, Ekonomi CNA

Deposits in foreign currency fall significantly in February/ Decrease by 128

The month of February has not been good for savings deposited in the banking system, both in local currency and in foreign currency. The negative performance is more oriented by the drop in business deposits, but even individuals have not managed to increase the money set aside.

According to Bank of Albania statistics, in February, the stock of euro deposits reached 7.27 billion euros, with a decrease of 1.7% compared to the previous month, or 128 million euros less. This is the strongest contraction of savings in the common currency, at least since 2016, when the Bank of Albania reports the detailed data in the currency. The trend is completely opposite compared to the previous months, when the monthly addition was relatively high (see graph: Monthly change of deposits in euros (mln euros), January 2016-February 2024).

The contraction in February came from the drop in business deposits (private non-financial corporations), which was reduced by 157 million euros, or 12.5% ??less. However, even individuals have not managed to increase their time deposits, while time deposits have expanded at much slower rates compared to previous months.

Due to the good performance until the end of 2023, foreign currency deposits have increased by 13.6% on an annual basis (February 2024/February 2023), or 871 million euros more.

Lek savings also fall

Deposits in foreign currency have also shown signs of slowing down. The stock of savings in local currency was about 592 billion ALL, with a contraction of 0.25% (1.5 billion ALL less) compared to the previous month. As with the currency, the impact was given by the drop in business savings, which shrank by 6%, or 6.4 billion lek less. In previous months, business savings had seen a strong growth.

Individuals' deposits in Lek also showed no signs of growth, despite the fact that the interest cycle is increasing. The more favorable returns on government securities seem to be directing individuals to the bond market.

On an annual basis (February 2024/February 2023), savings in ALL have increased by 7.4%, or 41 billion ALL more.

Reported in Lek, the total stock of savings in the country reached 1.3 trillion Lek in February, with a contraction of 0.4% compared to the previous month. 45% of the savings are in local currency and 55% in foreign currency, mainly euros./Monitor