FLASH
Shkruar nga Pamfleti
The fall of the euro against the lek is unstoppable. Even at abnormal rates. This Friday, one euro was exchanged for 108.73 ALL, which is a new historical record.
Official data from the Bank of Albania show that since the beginning of the year, the euro has lost more than 9 points against the lek. At the beginning of January, the European currency was trading at over 117 Lek, but today the exchange rate has dropped to 108.7 Lek. Now the threshold of exchanging 1 euro for 100 lek no longer seems taboo. Especially since the high tourist season has yet to start, which means that there will be even more currency on the market.
However, the euro is not the only major currency against which the lek is rapidly gaining ground. The dollar also continues to weaken. At the beginning of the year, the American currency stood at over 111 ALL. It is currently trading below the level of 102 ALL.
But what is happening with the exchange rate?
During the time of the pandemic, powerful economies such as the USA and the European Union materialized powerful incentives to avoid recession. From direct transfers for families to state funds for businesses, the supply of both the dollar and the euro has increased massively. Meanwhile, the US is interested in using this policy for another reason, which is related to the devaluation of its debt. The more the dollar depreciates, the cheaper the US repays its debt.
These are the external factors. But the exchange rate of the lek with foreign currencies also has internal factors. The Bank of Albania says that a strengthening of the lek against the euro is related to the increase in the supply of the European currency due to the improvement of the external position of the economy. So more income from tourism and migrant remittances.
However, now everyone is clear, even the Bank of Albania itself, that such a strong and unstoppable devaluation of the euro is not only a matter of remittances or tourism. But BSH will never admit this publicly. She will continue to say that the lek is being strengthened by tourism. Everyone else will continue to believe that the increase in the supply of euros in the Albanian market is not only from tourism and legal remittances from immigrants. In the end, from all this, Albanians are getting rich without working. But how much will be the damage to the competitiveness of the economy? This will be known later.
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