While deposits in ALL ek this year are showing significantly slower growth rates compared to a year ago, deposits in Euro continue to grow at a fast pace.

According to data from the Bank of Albania, the value of bank deposits in European currency at the end of July marked a new historical record, in the amount of 5.85 billion Euros.

Total deposits in this currency increased by 141 million Euros in one month, the highest monthly increase recorded for this year. The increase in Euro deposits is significantly higher compared to July of last year, when the monthly increase marked the value of 89 million Euros.

The annual growth of total deposits in Euro has reached 19.3%, this level is significantly higher than the average growth of bank deposits.

The increase in Euro deposits is distributed among individuals and businesses, while the increase continues to be mainly concentrated in accounts and time deposits, a clear trend in recent years, influenced by low interest rates.

The figures testify to the high supply and supply of the Euro in the Albanian economy. This high offer is also reflected in the exchange rate of the Euro against the Lek, which this summer marked the lowest historical levels.

Among the measurable factors, the increase in the flow of the Euro primarily reflects the record numbers of inbound tourism in Albania. According to INSTAT, in the first seven months of this year, 4 million foreign citizens visited Albania, an increase of 39% compared to the same period of the previous year.

The increase in the visits of foreign citizens to the highest historical levels is also affecting the increase in the flow of Euros in the Albanian economy. Based on historical data, the month that marks the highest growth of Euro deposits in the banking system is August, a month that also coincides with the peak of the tourist season.

The European currency continues to dominate the structure of bank deposits, despite the efforts of the Bank of Albania to reduce its weight, through several regulatory measures in 2018.

However, the presence of the Euro in the Albanian economy seems to have deep roots and the efforts to "fight" it only within the financial sector are not giving much success. According to the next analysis of the indicators that are the object of the deeuroization strategy, in the middle of this year foreign currency deposits accounted for 53.2% of the total bank deposits. Albanians are increasingly preferring the euro, although the deposit interest rates are lower compared to the Lek.

(Source: Monitor)