Need for cash, billions of lek were injected in the economy after the elections

The general elections that were held last summer in Albania disrupted the money situation in the domestic economy, which has immediately been in need of cash; a need which was fulfilled by the Bank of Albania. Such fact is confirmed by the central bank, confirming that it has intervened in the domestic money market immediately after the 25 June 2017 elections. “In the third quarter of 2017, interventions of the Bank of Albania in the money market consisted on operations in the open market by injecting cash”, the central bank explains about this situation, further explaining that compared to the third quarter of 2017, cash injected in the banking system was 6 billion lek higher, namely 38.5 billion lek. This reflects, at the same time, the need that commercial banks that operate in our country, had for cash, after the election period. We must not forget that this period was associated with a period of political crisis which lasted several months and which naturally made investors hesitate. “In circumstances of a shortage of liquidity during the summer season, 3 month repurchase agreements were renewed for higher amounts, on average for 14.6 billion lek as opposed to 10.5 billion lek in the previous quarter”, Bank of Albania experts explain among others, to confirm that during the period in question, there has been a need for liquidity by banks and this has obliged the Bank of Albania to intervene and adjust the situation. But, at the same time, the central bank has also confirmed the fact that after the elections, commercial banks did not have the necessary reserves, as they did before the elections.

Banks receive more liquidity, but they don’t release funds for crediting

Although they’ve had sufficient liquidities in their coffers during the second half of last year, thanks to the cash injection made by the Bank of Albania in the money market, private banks in our country continue to hesitate when it comes to crediting the economy.  This is indicated by the data regarding crediting for the third and fourth quarter of last year, according to which, crediting has been declining during these months compared to the first part of the year. This reflects the negative effects of the political crisis that accompanied the country in the run up to 25 June 2017 elections.