The government borrows to finance budget expenses that are not covered by revenues, but in recent years there has always been liquidity in the budget accounts, which is not being managed in the right way, the Supreme Audit Institution (ALSAI) points out in an audit conducted in the Ministry of Finance.

During the year 2023, after receiving the Eurobond, the total liquidity surplus of all currencies was in the range of Lek 75,131 billion. Most of the surpluses accumulated during the year were in foreign currency, fluctuating in the ranges of Lek 18,100 billion.

The Eurobond has increased the liquidity surplus in the euro currency by 224.27% compared to the liquidity situation in the euro on the previous date. While the surplus of liquidity in the local currency has fluctuated throughout the year 2023 in the range of Lek 4.50 billion. The data show that free liquidity in the accounts of the 2023 budget has reached 20% of the general budget expenditures in a given month.

By maintaining liquidity in euros, losses from the exchange rate of at least Euro 2.8 million have been created. ALSAI notes that liquidity management is found to be problematic due to several factors. The Ministry of Finance lacks specialized structures for the good administration of general government funds.

The lack of operational instruments, which are applied unilaterally by the Bank of Albania and with exclusive conditions, have been found.

Another reason is the accumulation of funds during the last part of the budget year. The frequent change of the budget with normative acts and the lack of timely detailing of the budget plan is creating liquidity.

It has been verified that monetary assets in euros are presented with significant liquidity surpluses and the possibility of their investment in the deposit to benefit from interest income has not been used, at the same time when holding these currencies is associated with costs.

In addition, performing conversions through SWAP exchange instruments throughout 2023 has resulted in significant losses due to the difference in spot-forward rates, and not utilizing the opportunities to perform unilateral foreign currency-to-currency conversions natively.

ALSAI notes that the conversions carried out through SWAP instruments turn out to have been carried out in the opposite direction to the stipulations in the agreement between the Bank of Albania and the Ministry of Finance and Economy, where in article 5 it is provided that "To manage liquidity in foreign currency and flows of external debt service, the Ministry can request the realization of SWAP contracts with the Bank". The concept of performing these conversions consists in covering the needs for payments in foreign currency using the local currency and not the other way around, argues the Supreme Audit Institution.