The Governor of the Bank of Albania, Gent Sejko, said on Friday that the improvement in the economy's external balance has been decisive in the strengthening trend of the domestic currency Lek in the foreign exchange rate.

In his annual report to the Parliament, the Governor stated that the external position of the economy has been consolidated, thanks to the further increase in exports, remittances, and foreign direct investment.

“During 2024, total exports reached Euro 9.1 billion, increasing by 11% compared to the previous year, driven by tourism revenues worth Euro 5 billion. Remittances also reached Euro 1 billion, while inflows from foreign direct investments reached 1.6 billion euros. Overall, the balance of trade and financial exchanges abroad has improved over the last three years, recording minimum current account deficits and being reflected in the strengthening trend of the exchange rate. Reflecting these dynamics, external debt fell to 40.6% of GDP, while the foreign exchange reserves of the Bank of Albania have reached close to the level of 7 billion euros, providing an increased guarantee for the country's financial stability,” said Sejko.

The average euro-lek exchange rate fell for the fourth consecutive year and touched a new historical minimum for 2024. According to figures from the Bank of Albania, the Euro was exchanged on average last year for Lek 100.71, down 7.4% compared to 2023.

Sejko also noted that the fiscal position has further improved, as shown by the reduction in the budget deficit and public debt to 0.7% and 53.8% of GDP, respectively, by the end of 2024.

The banking system has also improved its stability indicators, increased its deposit base, and significantly expanded its loan portfolio. These developments have increased the banking system's ability to supply the economy with stable and low-cost funds, and have enabled the expansion of the use of modern payment instruments.

In light of these developments, Albania experienced an improvement in the sovereign debt risk assessment by specialized international agencies, which contributes to reducing the financing costs of the Albanian economy in the foreign market.

According to the Governor, this picture reflects - among other things - the contribution of the Bank of Albania, through monetary and macro-prudential policy, prudential supervision and regulation of the banking system, as well as measures to promote the development of the financial market and the payment system.

“After a phase of normalization during 2022-2023, the monetary policy stance became more accommodative during the second half of 2024 and 2025. This approach was dictated by the need to recalibrate monetary conditions in an environment of declining inflation. In this context, we undertook two cuts in the key interest rate, lowering it from 3.25% at the beginning of 2024 to 2.5% in July 2025. In parallel, we intensified foreign exchange purchases in the domestic market, withdrawing almost 914 million euros from it during 2024, and continuing at similar rates during 2025. The increased presence in the foreign exchange market aims to curb the speed of the strengthening of the Lek exchange rate, calm activity in the foreign exchange market, and minimize potential negative consequences on monetary stability. And financial situation of the country, consequences which may arise from the creation of speculative positions or from increased exchange rate volatility," said Sejko.

According to him, these measures have brought a significant improvement in financing conditions for households and businesses.