FLASH
Shkruar nga Pamfleti
The foreign exchange purchases of the Bank of Albania suffered a strong brake in last week's auction.
The amount planned to be purchased in the first round of the auction was between five and nine million euros, but could not be met due to the low value of the claims that were submitted.
At the auction, total requests were presented only in the amount of 4.5 million euros. Of these, the Bank of Albania accepted only 2 million euros.
Purchases in the first round were made at a rate between 106 and 106.2 lek. The weighted average rate of purchases in the first round was ALL 106.08.
The Bank of Albania also exercised the purchase option in the second round, for a small additional amount of 0.5 million euros, with the average purchase rate in the first round, of 106.08 ALL. In total, the amount purchased at the auction on August 18 amounted to only 2.5 million euros, a sharp decrease from the amount of 18 million euros that was purchased at the previous auction, on August 4.
The partial failure of Friday's auction may be indicative of high private market demand for Euros over the past week. This request brought a significant increase in the Euro exchange rate by almost 2.2 lek in the space of one week. On Friday, the Euro was exchanged at 106.01 ALL, the lowest level since June.
The Bank of Albania decided in August to increase the planned purchases of Euros in the domestic foreign exchange market to a range between 220 million euros and 300 million euros, from the previous range of 160 million - 220 million euros. This decision came as a way to withdraw the large amount of currency from the market and to restrain the further strengthening of the Lek.
On the other hand, for the first seven months of the year, the Bank of Albania already bought around 170 million euros (to which 18 million euros from the first auction in August are added), but despite this the exchange rate of the European currency with the Lek has marked unprecedented decline this year.
Although in theory foreign exchange auctions are carried out in the service of the administration of the foreign exchange reserve, in practice the Bank of Albania has decided to use this mechanism also in the function of intervention in the foreign exchange rate.
However, short-term market developments seem to have surprised even the Bank of Albania. The next auction resulted in a purchased amount of only 2.5 million euros, while the exchange rate of the European currency increased significantly last week.
This shows that, in fact, the Bank of Albania's auctions continue to have a weak impact on the performance of the exchange rate, even the second auction in August was practically unnecessary due to the withdrawal of the surplus currency from the market. The increase in the Euro exchange rate was mainly the result of the mechanisms of the free market and not of the Bank of Albania's intervention in it. /Monitor
Lini një Përgjigje