Euro reaches 91.8 lek, setting a new historic record/ Depreciation reaches 5.1% since the beginning of the year

The euro began the week with a further decline against the lek, reaching a new historic low. According to the official exchange rate of the Bank of Albania, the European currency was exchanged at 91.8 lek today, the lowest level ever recorded.

The lek continues to strengthen, while the euro’s decline has reached 5.1% since the beginning of the year and 5.3% compared with the same period last year.

The supply of euros on the market appears to remain high even after the end of the peak summer season in July and August.

The tourist season has been extended, also favored by the high temperatures, causing foreign-currency inflows from tourists to increase.

Meanwhile, the continued depreciation of the euro appears to be reducing demand for the European currency, at least for use in domestic economic transactions.

Overall, foreign-currency inflows into the Albanian economy and the balance of payments are showing stronger performance this year.

According to data from the Bank of Albania, in the first half of 2026, the current-account deficit fell to a total of 361 million euros, or 40.6% less than in the same period last year.

The current-account deficit for the first half of the year also reached its lowest level since 2018. The reduction in the deficit was driven mainly by increased exports of services and remittances.

The balance in trade in services was positive, at approximately 1.79 billion euros, up 12.9% compared with the first half of last year.

More than half of the contribution from the services sector came from tourism, which brought net revenues of 957 million euros to the economy in the first half of the year, an increase of 20% compared with the first half of last year.

The strong growth in foreign direct investment also appears to have had an additional effect on the overall balance.

Data from the Bank of Albania show that, in the second quarter of 2026, the value of foreign direct investment reached 741 million euros, up 86% compared with the same period a year earlier.

This increase was significantly influenced by flows linked to an important development project in the real-estate sector.

For the entire first half of the year, the total value of foreign direct investment reached 1.144 billion euros, an increase of 50% compared with the same period last year.

In addition, the policy pursued by the Albanian government in recent years, involving large budget surpluses during most of the year, is believed to be exerting an additional influence on the strengthening of the lek.

In the first seven months of 2026, the budget recorded a surplus of 50.7 billion lek, up 60% compared with the same period a year earlier.

The Bank of Albania continues to buy foreign currency in an effort to curb the rapid decline in the euro exchange rate, but this year the effectiveness of its interventions has been lower.

Figures on the Bank of Albania’s interventions have been made public only through the end of the first quarter, when approximately 140 million euros were purchased, the highest figure ever recorded.

Figures for the subsequent period have not yet been made public, but based on indirect estimates, market analysts believe that purchases have increased further compared with the same periods in the previous two years.

Earlier, during the 2024-2025 period, the central bank had withdrawn more than two billion euros from the market in an effort to slow the strengthening of the domestic currency./Monitor