Euro hits historic low, falls below 93 lekë for the first time

The European currency has set another negative record against the lek. Official exchange-rate data from the Bank of Albania show that the euro has fallen below the 93-lek threshold for the first time.

The weakening of the common European currency has continued, bringing it to its lowest level ever. According to the Bank of Albania, the euro is trading at 92.96 lekë.

The decline coincides with the peak of the tourist season, when foreign-currency inflows into the Albanian economy reach their highest point of the year. The supply of euros in the market has increased significantly due to tourist flows, emigrant remittances and revenue from tourism-service exports, fueling the lek’s continued strengthening.

Expectations are that this trend will continue in the coming days. Albania is in the most intensive week of the summer season, and the high supply of foreign currency is expected to keep the euro under pressure, while a further weakening of the currency this week cannot be ruled out.

The euro is losing ground even though the Bank of Albania has increased its purchases in the domestic market for several weeks. These operations aim to ease sharp exchange-rate movements and curb the appreciation of the lek, which is creating difficulties for exporters and sectors that generate revenue in euros.

So far, however, market forces have outweighed the impact of the interventions. The large amount of foreign currency in circulation has continued to exceed demand, pushing the euro to new historic lows.

For businesses and consumers making payments in euros, the depreciation of the European currency reduces the cost of imports and the repayment of foreign-currency obligations. Meanwhile, exporters and families receiving remittances are earning less after conversion into lekë, while the impact of the strengthening domestic currency is increasingly being felt in their economic activity.