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The return on investment of foreign exchange reserves improved in 2025

2026-04-13 14:54:00, Ekonomi CNA

The return on investment of the foreign exchange reserve marked a slight increase last year. According to information from the Bank of Albania, the return on the reserve was positive at 3.03%, up from 2.91% in 2024.

A slight increase in interest rates in international markets, especially in the second half of 2025, has led to a small upward correction in the return on foreign exchange reserves.

Also, a positive impact is estimated to have been provided by the increase in gold prices.

At the end of 2025, the composition of gross foreign exchange reserves by currency was dominated by the Euro with 60.3%, followed by the US Dollar with 22.3%, Gold with 5.9%, IMF Special Drawing Rights (SDR) with 3.7%, British Pound with 2.5%, Chinese Renminbi with 2.7%, Japanese Yen with 2%, and Australian Dollar with 0.6%.

At the end of December 2025, the gross foreign exchange reserve stock also included about 116.99 thousand ounces or 3.64 tons of monetary gold.

The foreign exchange reserve administered by the Bank of Albania is invested in liquid assets, mainly with maturities of 1-3 years and 3-5 years.

The weight invested in debt instruments with a maturity of over 5 years resulted in an increase, representing around 13.4% of the reserve portfolio invested in securities, at the end of the year.

The portfolio managed by the external administrator (IBRD, part of the World Bank) continued to be invested primarily in debt instruments issued by governments and government agencies, against a reference portfolio of 1-3 year US Treasury issues.

In order to increase the foreign exchange reserve, in December the portfolio managed by IBRD was changed, initiating a new investment mandate in mortgage-backed securities (MBS). This investment mandate will be implemented with an investment horizon of 5 years.

At the end of 2025, about 63.7% of the foreign exchange reserve portfolio was invested in names with high quality ratings (class AAA and AA, including current account and SDR exposures).

Exposures by type of issuer/counterparty invested with are represented by government/central bank (81%), followed by banks/other financial institutions (7.7%), multilateral institutions (5.9%), agencies (4.4%), government authorities/public bodies (0.5%) and institutions guaranteed by governments (0.4%).

According to statistics from the Bank of Albania, at the end of last year, the country's foreign exchange reserves were worth 6.3 billion euros. The value of foreign exchange reserve assets has increased by 16.5% compared to the previous year. /Monitor