The European currency continued to weaken against the lek this week, reaching another negative record. According to the official exchange rate of the Bank of Albania, the euro traded at 91.4 lekë today, the lowest value ever recorded.
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Compared with the beginning of the calendar year, the euro-lek exchange rate has fallen by 5.5%, while the annual decline has reached 5.7%. This continued depreciation, which began in the first quarter of this year, has accelerated the pace of the European currency’s decline.
Market agents estimate that downward pressure may continue, driven by substantial inflows of foreign currency during the summer season and weak demand for euros.
The euro’s weakening also appears to have affected its use in asset sale and purchase transactions in the domestic market, including real estate. At the same time, euro deposits are growing at a slower pace, signaling an increasing public tendency to keep savings in the domestic currency.
These developments are likely to increase downward pressure on the euro exchange rate, a trend that has generally been evident for more than a decade. It is linked to the structural improvement in the external position of the Albanian economy.
This long-term improvement has been supported by rising tourism revenues, the expansion of service exports and increased foreign direct investment, particularly in the real estate sector. Informal foreign-currency inflows are also perceived to have played a partial role in this trend.
Data from the Bank of Albania show that the balance of payments also improved significantly during the first half of this year. In the first half of 2026, the current account deficit fell to 361 million euros, or 40.6% less than in the same period last year.
This is the lowest current account deficit recorded for a six-month period since 2018. Service exports and remittances made the largest contribution to its reduction. The balance of trade in services was positive at around 1.79 billion euros, increasing by 12.9% compared with the first half of last year.
Tourism accounted for more than half of the services sector’s contribution. During the first six months of the year, it generated net revenues of 957 million euros for the economy, 20% more than in the same period last year.
The significant increase in foreign direct investment also contributed to the improvement in the overall balance. According to the Bank of Albania, in the second quarter of 2026, foreign direct investment reached 741 million euros, an increase of 86% compared with the corresponding quarter a year earlier.
This increase was driven significantly by flows linked to an important development project in the real estate sector. In total, during the first six months, foreign direct investment reached 1.144 billion euros, increasing by 50% compared with the same period last year.
Another factor affecting the market is the high fiscal surplus, which is reducing the supply of lekë.
In the first eight months of 2026, the budget recorded a surplus of 61.6 billion lekë, 52% higher than in the same period a year earlier.
