Albanians have more foreign currency in their hands

Albanians have more foreign currency in their hands
Recently, Albanians have had more foreign currency, euros or dollars, in their hands. Such phenomenon is confirmed by the Bank of Albania, according to which, a part of this currency has now been deposited in the banking system. “Deposits in foreign currency have registered an annual average growth of around 4.6%, while deposits in lek have only seen a growth of 2.4%”, banking experts say in the last quarterly report. Bank experts also add that “the growth of deposits in the banking system was mainly driven by individual deposits in foreign currency”.

In other words, individuals were the ones to generate more euros or dollars rather than businesses, which continue to operate in the domestic currency, lek. “Business deposits have been on the rise and almost all of them have been in the national currency”, bank experts say. This goes to prove that businesses have not had any fresh surplus in foreign currency, which could have been generated this year from their private activity. On the other hand, another phenomenon which they have pointed out is also the fact that individuals have deposited euros or dollars in the banking system for a long period of time. This shows that the foreign currency surplus which they have recently generated, was not needed by them for consumption, other expenses and not even for investments. It seems that the only objective was to keep this money safe in the bank. “Most of deposits now have a two year maturity period. The number of these deposits is high and in the majority of cases, they’ve been in foreign currency”, experts say.

Eurostat: In 2016 Albanians transferred 113 million euros abroad

The fact that in the recent years, Albanians have had more foreign currency in their hands, has also been confirmed by the European Institute of Statistics (Eurostat).

According to this institution, last year alone, Albanians have transferred 113 million euros abroad. This amount has been greater than in all the countries of the region, with the exception of Serbia. Meanwhile, according to Eurostat, last year, Serb citizens have transferred 178 million euros abroad. Meanwhile, the country which has transferred fewer funds abroad is Macedonia with a total of 16 million euros. Macedonia is followed by Montenegro, the citizens of which have transferred 34 million euros abroad and Kosovars with 40 million euros. On the other hand, Eurostat has confirmed that last year, Albania has managed to “attract” 900 million euros into its territory thanks to remittances by migrant workers and thanks to direct foreign investments.

Lek’s appreciation, experts: Greater supply of euros in the currency market

The fact that Albanians have more euros in their hands, seems to have led to a depreciation of the European currency in the domestic money market. This is a phenomenon which has been constantly confirmed by economy experts, but also by the governor of the Bank of Albania. According to them, a higher supply of euros has led to the European currency to mark a significant drop in value compared to the domestic currency, lek. Yesterday, 1 euro was sold 133.3 lek, while in August this year, euro fell to 131 lek. But, experts don’t know where this unexpected amount of money came from, while the level of remittances was not much different to previous years.

Low interests rates, individuals prefer sight deposits

Low interest rates on deposits have led to many people to put their money into sight deposits. In other words, instead of putting their money in the bank for a particular period of time without being able to withdraw them, they prefer to put them in the bank without giving the bank any notice when withdrawing them. This phenomenon has been confirmed by the central bank, according to which, sight deposits have registered a significant increase. “At the end of September, current accounts and sight deposits accounted for 40.8% of total deposits or 0.5% higher than the end of the second quarter of the year”, the Bank of Albania says.

Average interest rates on deposits is 0.9%

Interest rates on new deposits in the third quarter of the year were minimal. This is confirmed by experts of the Bank of Albania, who say that the average interest rate on deposits was 0.9% and the same percentage also applied in the first two quarters of the year. “During this quarter, there’s been an increase of interest rates in deposits with a long maturity period”, bank experts also say. Meanwhile, as far as interest rates on new deposits in euros are concerned, they say that in this quarter, interest rate was 0.2%, registering a growth compared to the previous two quarters. This shows that interest rates on deposits in euro are always lower than on deposits in the national currency.

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