The European currency Euro continues to fall in the local exchange rate and is approaching the limit of Lek 99.

According to the official exchange rate of the Bank of Albania, the European currency was exchanged for Lek 99.28 on Tuesday, marking a new historical minimum.

The annual decline rate of the euro is accelerating again and has already reached 6.7%. Foreign exchange agents say that in recent days the demand for euros is even lower.

Also, the US Dollar has continued its decline and was exchanged on Tuesday at Lek 89.12 and remains at the lowest levels of the last 15 years.

The Bank of Albania managed to keep the euro exchange rate above the level of Lek 100 until August. However, the withdrawal of the central bank has brought back the downward pressure on the euro, following the trend of recent years.

The Euro is depreciating due to the high supply of the European currency in the local market, which can be explained especially by tourism and foreign investments. In addition to the high values ??of investment in real estate in recent years, an innovation this year is the increase in portfolio investments. These investments mainly consist of the purchase of Albanian government debt securities by foreign investors.

For the 6 months of 2024, the total value of foreign direct investments reached Euro 749 million, also the highest historical level ever recorded for this period of the year. The value of foreign direct investments increased by 8% compared to the same period of the previous year. The value of foreign direct investments exceeded the value of the current account deficit by 30%.

Meanwhile, the fiscal policy of the government continues to support the strengthening of the Lek, shrinking the supply of local currency in the market. At the end of the 7 months, the budget surplus reached a record for the period, in the amount of Lek 55 billion, increasing by 22% compared to the same period of the last year.

Until now, the unprecedented strengthening of the Lek in the exchange rate has helped to significantly reduce inflation and public debt in foreign currency.

In general, entities with revenues in Lek and expenses in foreign currency have had gains on their balance sheets, including the Albanian government, importers of goods and services, and domestic borrowers in foreign currency.

On the other hand, the continuous strengthening of the Lek has harmed the exporters of goods and services, exerted upward pressure on real estate prices, as well as reduced the value of savings in foreign currency.