BREAKING NEWS

Meta-Kryemadhi intercepted by BKH, here are the details from the file that prosecutor Sotir Kllapi is investigating, in the scanner properties and bank accounts, from the withdrawal of 20 thousand euros in 2008, building permits, villas in Lalzi Bay, t...

Meta-Kryemadhi intercepted by BKH, here are the details from the file that
x
BREAKING NEWS

The arrest warrant is ready for Ilir Meta, this is the last session of his questions in SPAK, here is the evidence that has sunk him, the lawyer Romeo Kara brings out the hard details

The arrest warrant is ready for Ilir Meta, this is the last session of his
x
BREAKING NEWS

The alliance between Sali Berisha and Ilir Meta has broken, Myslym Murrizi reveals what is happening within the opposition and shows the "recipe" that will overthrow Edi Rama from power

The alliance between Sali Berisha and Ilir Meta has broken, Myslym Murrizi
x
BREAKING NEWS

Donald Lu speaks for the first time about the high-ranking Albanian officials who are all being put in prison for corruption by SPAK and "reveals" the Rama government, how the former US ambassador lined up 140 deputies to vote for the justice reform

Donald Lu speaks for the first time about the high-ranking Albanian officials
x
BREAKING NEWS

The maneuvers of the oligarch Klodian Allajbeu, this is how he bought his American hospital for 24 million euros, gave a loan to the company that was in his name, suspicious transactions are revealed, should SPAK start an investigation for money launde...

The maneuvers of the oligarch Klodian Allajbeu, this is how he bought his
x
BREAKING NEWS

This is why Monika Kryemadhi was called to SPAK, the prosecutors are looking at the possibility of initially leaving her under "house arrest", the lawyer Idajet Beqiri who denounced the PL couple revealed other bombastic details about the affairs of th...

This is why Monika Kryemadhi was called to SPAK, the prosecutors are looking at
x
BREAKING NEWS

Sali Berisha without a mandate after June 21, the victory of the stamp of the DP like that of Pirros of Epirus, Argita takes the reins of the Democratic Party and excludes the group of Basha from the union

Sali Berisha without a mandate after June 21, the victory of the stamp of the DP
x
BREAKING NEWS

Generals, soldiers, ministers and oligarchs to prison for the base of Saranda, at the head of this affair is President Bajram Begaj, the character who "made a hole" in SPAK warns Edi Rama after his attacks on justice

Generals, soldiers, ministers and oligarchs to prison for the base of Saranda,
x

Ekonomia

How the Bank of Albania is stopping the "rollover" of the euro, keeping the exchange rate near the limit of 100 lek

How the Bank of Albania is stopping the "rollover" of the euro,

For weeks, the exchange rate between the euro and the lek has been maintaining an unusual stability compared to the trends of recent years. According to the official exchange rate of the Bank of Albania, on Wednesday the euro was exchanged for ALL 100.32, which represents the lowest historical level of the exchange rate between the two currencies.

However, since the beginning of May, exchange rate fluctuations have been small and the rate of depreciation of the euro has been significantly slowed down. This stability is not very typical for this period of the year, when the increase in foreign exchange flows from tourism generally leads to a further strengthening of the local currency.

According to sources from the foreign exchange market, the stabilization of the exchange rate near the level of 100 lek is due only to the intervention of the Bank of Albania, which is regularly buying currency, with the aim of artificially keeping the exchange rate at these levels. Apparently, at the moment the central bank does not want to allow the exchange rate to fall below the level of 100 lek, which somehow represents an important symbolic and psychological limit.

According to the actors of the foreign exchange market, foreign exchange flows in the market are high and in the absence of intervention by the Bank of Albania, the euro would definitely have dropped below the limit of 100 lek. Legally, Albania has a free exchange rate regime. However, in special cases, the Bank of Albania may intervene in the exchange rate, to avoid irregularities in the foreign exchange market or when such intervention can be justified in terms of the inflation objective.

In fact, for months inflation has been continuously falling and in April of this year it dropped to 2.1%, the lowest level in almost three years. After the last meeting of the Supervisory Council, Governor Sejko said, however, that this rapid fall in inflation will be temporary and that it is due to supply factors, mainly the reduction in the prices of imported goods, but also the strengthening of the lek in the exchange rate exchange.

However, an inflation below the target of 3% in theory creates room for the central bank to intervene in the direction of devaluation of the local currency, withdrawing currency from the market and increasing the money supply in lek. Basically, this is what the Bank of Albania is doing in the current situation. Although curbing the fall of the Euro-Lek exchange rate can be justified with the legal objective of inflation, in fact the main motivation for such an intervention seems to be the protection of those segments of the economy that have income in foreign currency.

This includes the exporting sectors of goods and services, but also families dependent on remittances and other individuals who, for various reasons, have a salary or other income in foreign currency.

A further drop in the exchange rate would further damage the competitiveness of export industries, but also of the tourism sector, which has been growing at very high rates in recent years. For this reason, the Bank of Albania has probably judged that it is necessary to maintain a balance between the free exchange rate and the interests of the economy. At the moment, it seems that this balance has been found close to the limit of 100 lek. However, it is clear that downward pressures on the euro exchange rate will increase further over the coming months. The Bank of Albania will be faced with the dilemma of whether it should increase currency purchases even more to keep the exchange rate stable, or allow a further, partially controlled fall of the euro./Monitor