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Euro ends the week in decline/ Touches new record

2026-05-08 16:02:00, Ekonomi CNA

The Euro-Lek exchange rate has closed this week in further decline and has touched a new historical minimum. According to the official exchange rate of the Bank of Albania, the European currency was exchanged today at 95.44 lekë, the lowest level of all time.

Since the beginning of the year, the Euro has depreciated by 1.4%, while on an annual basis the decline of the European currency has reached 2.8%.

The second quarter appears to have further strengthened the downward pressures on the Euro exchange rate, pressures that, unlike previous years, were visible even in the first quarter of the year.

Foreign exchange agents say that foreign exchange supply is abundant, while demand is low, causing the market to push towards a further decline in the Euro exchange rate.

Given the increasing trajectory of foreign exchange inflows over the coming months, it is reasonable to think that these pressures may intensify further.

Particularly in the last two years, the decline of the Euro has been curbed by purchases of foreign currency in large amounts by the Bank of Albania.

According to official statistics, last year the Central Bank bought 1 billion and 27 million euros, with the objective of increasing foreign exchange reserves, but mostly in order to curb the strengthening of the Lek exchange rate. The amount of foreign exchange purchased has increased by 10% compared to the previous year.

Foreign currency purchases have continued throughout the first months of this year, given the downward trend in the Euro-Lek exchange rate, but the purchase figures have not yet been made public.

For 2026, the Bank of Albania has planned to further increase its planned purchases of foreign exchange in the domestic market. It aims to purchase 330-450 million euros through auctions, with the objective of increasing foreign exchange reserves, not counting direct purchases, which will depend on the performance of the exchange rate.

But, in conditions where inflation is approaching the 3% level, the Bank of Albania's scope to intervene in the foreign exchange market through Euro purchases may narrow significantly.

A withdrawal, even partial, of the Bank of Albania from purchases could pave the way for a faster decline in the Euro exchange rate, especially during the summer season.

On the other hand, however, an increase in the prices of imported goods, starting with fuel, could exert an impact in the opposite direction, increasing the demand for foreign exchange in order to finance imports. /Monitor