Euro falls to new lows despite Albanian central bank intervention

Tirana, Nov 10, 2024 - The euro fell to new lows against Albania’s currency, the lek, over the weekend, even as the Bank of Albania ramped up interventions to stabilize the exchange rate.

The euro dropped to 97.8 leks for purchase and 98.4 leks for sale, according to official rates, marking a 6.5% decline from this time last year. This decline has prompted the Bank of Albania to buy €137.6 million in the first half of the year, with plans to purchase a further €330 million by the end of 2024.

Analysts attribute the euro’s continued slide to Albania’s tourism sector and a steady influx of foreign currency, bolstered by investments and remittances from abroad. This flow of euros into the market has kept the currency’s value down against the lek.

While the euro’s drop is concerning for exporters and businesses with euro-denominated costs, it has helped ease inflation within Albania. The Bank of Albania reports that the lek’s strength has contributed to a recent decline in inflation, offering consumers some relief from rising prices.

The central bank’s intervention aims to stabilize the euro further, but for now, the lek’s appreciation against the currency reflects ongoing cash inflows from tourism—a trend that appears likely to continue.