The euro hits a historic low, exchanged at 96.57 lek, but it is expected to weaken further by year-end

With the arrival of December, the approach of the year-end holidays, and the increase in remittances sent by emigrants to their families in Albania, the euro has reached its lowest historical level ever.

The European currency is being exchanged at 96.57 lek, while a year ago it stood at 98.32 lek.

Analysts expect this downward trend of the euro to continue as the year-end approaches.

“We have positive indicators from foreign direct investments and remittances, which may influence the exchange rate, but their trend does not align with the depreciation trend of other currencies against the lek. This is not a seasonal or temporary phenomenon, but a stable and established rate,” says economic expert Igli Tola.

To curb further depreciation of the euro and maintain stability, the Bank of Albania withdrew 800 million euros from the market by September, while a total of 933 million euros were withdrawn throughout 2024. This situation has significantly affected sectors most impacted by the depreciation.

“A stronger local currency makes domestic products less attractive for export. We have not seen a drop in wholesale or retail prices as a result of the exchange rate depreciation, but other factors like customs duties and production costs also play a role,” adds Tola.

International institutions advise the central bank to allow a free-floating exchange rate and to reduce market interventions.

“KORÇA BOOM”