Euro at the limits of 110 lek, reaches the highest level since June 1

2023-08-24 16:37:49Biznes SHKRUAR NGA REDAKSIA VOX
Euro at the limits of 110 lek, reaches the highest level since June 1

For the second day in a row, the Euro marked a strong increase in the exchange rate with the Lek.

According to the official exchange rate of the Bank of Albania, the European currency was exchanged on Thursday at 109.08 ALL, further increasing by 1.45 points since yesterday.

The euro has increased by more than 3 lek since the beginning of this week, while it has touched the highest level since June 1.

The growth of the Euro continues to attract other foreign currencies. The American dollar returned above the value of 100 lek for the first time since the beginning of June.

The American currency was exchanged at 100.54 ALL, increasing by three ALL since the beginning of the week. The British Pound also registered a similar increase, reaching 127.38 lek on Thursday, the highest value since the end of May.

According to sources from the market, in the last few days there is a great demand for purchases from commercial banks, especially from one of the big banks of the sector. Such short buying periods have been observed at other times this year.

Such a demand may come as a result of a high demand from the bank's customers or due to the need to close the open positions in foreign currency, from the previously realized sales.

In this period, it is difficult to explain a large demand for foreign exchange from the market, to explain such a strong increase in the exchange rate of the Euro.

At the moment, even the Albanian Electric Corporation, one of the big buyers in the foreign exchange market, is not carrying out any significant energy import procedures.

However, it is not excluded that large commercial companies have decided to make large purchases of euros in this period for future needs, considering that the summer season is about to close.

Another possibility could be the purchase of currency for dividend distribution needs from banks or other large corporations. For example, only the National Commercial Bank for this year has decided to distribute profit in the amount of 50 million US dollars, based on the decision of the Shareholders' Assembly.

The rapid growth of the Euro exchange rate gives breathing space to those sectors that were damaged by the devaluation of the European currency, mainly exporters of goods and tourism businesses. The rise of the euro enables accommodation businesses, which provide income mainly in euros, to secure more fruits from the tourist season, which was characterized by a record number of tourists, but also rising prices.

Although it remains to be seen whether the growth of the Euro will be sustainable, the strengthening of the European currency, on the other hand, will increase inflationary pressures in the economy. The strong lek has been one of the barriers that has partially protected the Albanian economy from the strong increase in commodity prices in foreign markets.

Also, the strong Lek has made it possible to maintain lower interest rates compared to most other economies. A sustained weakening of the Lek in the exchange rate will most likely be followed by an increase in interest rates by the Bank of Albania in the fall./Monitor