FLASH
Shkruar nga Eduard Zaloshnja
Governor Sejko must take into account the current Albanian economic reality, and not only the macroeconomic dogma of the IMF. After all, it is paid by ordinary Albanian taxpayers...
The euro fell to 1 to 100 in the lek exchange rate on July 20, but a strong increase in the purchase of foreign currency in the market by the Bank of Albania (within the increase of our foreign exchange reserves), caused the rate to go above 1 to 110 in five weeks – on August 27, at the height of the tourist season!
Our foreign exchange reserves reached almost 6 billion Euros (according to the Bank of Albania), enough to cover 7.3 months of average imports in goods and services, or about 516% of short-term foreign debt.
Following the growth curve of the Euro last August, it seemed that the Bank of Albania would continue its strong purchases of currency in the market, and the Euro would stabilize in the winter at the usual 1:120 rate. But apparently pressured by the IMF, Governor Sejko declared in September that the Bank of Albania has its economic policy of not intervening in the exchange rate; therefore, it only makes programmed purchases for the country's foreign exchange reserve.
Translation: The Euro would gradually fall from the peak of 110.55, recorded on August 27th, to 100.1, where it has arrived today (see chart below).
But Governor Sejko must take into account the current Albanian economic reality, and not only the macroeconomic dogma of the IMF. After all, it is paid by ordinary Albanian taxpayers...
The 1 to 100 Euro exchange rate constitutes a strong psychological barrier. That it was broken, could bring a cascade of financial consequences for the banking system, as well as economic consequences for the Albanian people.
Thus, almost three quarters of Albanians' savings in banks are in foreign currency. And the fall of the Euro below the 1:100 limit can bring an influx of savers who want to withdraw their savings or who want to convert them from currency to Lek. And an experienced banker like Sejko should know what instability causes in the banking system an influx of customers in banks...
Also, the currency hidden in mattresses can flow to currency exchange points, while millions of foreign tourists are flooding there. And suddenly, the exchange rate can go down to 1:90. And then the exporters, badly hit until today, will seek in the foreign exchange market as much lek as possible (so that they have a reserve), reducing the Euro even lower, up to 1:80...
The banking-financial system is a beast that must be carefully kept under control, Alan Greenspan (former governor of the American Federal Bank) once said, because otherwise, the economy and the whole people suffer the consequences. Governor Sejko should follow this advice of the wise old American banker, and discuss with the Minister of Finance Mete on a more prudent monetary-financial policy, before the psychological barrier of Euro 1:100 is broken...
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