The Bank of Albania’s Governor Gent Sejko declared at the Summit of Ministers of Finance and Governors that the Albanian Currency has been one of the most stable currencies compared to other Central and Eastern European countries’ currencies.
Speaking at “The financial future of the region” summit held in Becic, Montenegro on June 12-13, Sejko said that the developments of Euro currency are crucial and determinant regarding the competition of exports and financial development in the country, since almost the half of savings in second tier banks and about 50% of the loans keeps being in the Euro currency in Albania. In turn, the US dollar is important for being a trade mean and as the second currency that banks use to for their clients’ savings.
The dominance of Euro in the Albanian market was evidently noticed during the Greek and Italy’s economic crisis that started back in 2008 and affected mainly in the financial stability. At that time, about 75% of the portfolio of surplus loans was in Euro but the Albanian currency suffered little fluctuations.
“Albania is linked to the Euro and US dollar currencies because Albania was the last economy to embrace the Swiss currency. At the time the Swiss currency entered in the Albanian market, the Bank of Albania deterred the entering of new foreign currencies in the market through a macro prudential regulation, being frightened by the rapid increase of loans in foreign currency,” declared Sejko.
The Governor highlighted that the narrowing of the gap of monetary policies between Albania and Eurozone countries which nowadays is only 2% has been the main reason which kept the Albanian currency stable in years. Keeping the Albanian Lek stable has not been an easy task, considering that the remittances decreased significantly and the external deficit increased during the European economic crisis.
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