BoA purchased 36m euro for its foreign exchange reserve during 9-month period of 2017

Bank of Albania has purchased about EUR 36 million in the domestic foreign exchange market for the 9-month period of 2017.

According to information over money market interventions, only two auctions were conducted during the third quarter, involving a total of 22.6 million euro.

The Bank of Albania has used the favorable situation in the exchange rate, to undertake currency purchases at even higher values ​​than forecasts.

Thus, according to the published calendar of auctions, during the first 9 months, currency purchases were foreseen for a maximum amount of about 32 million euros.

But especially in the third quarter, when the euro’s flows on the market were higher, the Central Bank has decided to buy bigger amounts.

Last summer, the euro rate dropped below the value of ALL 133, at the lowest levels since 2009.

The Bank of Albania plans to buy about EUR 56 million in 2017, with the aim of increasing the foreign exchange reserve.

The high level of euroization in the financial system and, in particular, the sharp increase in euro deposits during the last two years has prompted the Bank of Albania to decide in favor of an increase of the foreign exchange reserve.

Currently, foreign exchange reserves serve as an instrument intended to cover the emerging economic needs of the economy for foreign currency and to mitigate strong shocks in the exchange rate.

However, the Bank of Albania intends to increase this reserve as a means of the stability target of the financial system.

SCAN

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