BoA’s deeuroization strategy has produced first effects: Expert

The introduction of the Bank of Albania’s strategy in February to reduce the euroization of the Albanian financial and economic system may have begun to give the first effects to the economy.

Financial system expert Arjan Kadareja told TV SCAN that, although the objectives of this strategy are long-term, making its public likely has an impact on the expectations of banks and economic agents.

Banks are expected to have increasing costs for the euro and may increase their efforts to orient the depositors and borrowers towards the Lek.

According to data from the Bank of Albania, in February, EUR 46 million was allocated for new loans in euro, 20% less compared to the same period a year earlier.

While the new credit in ALL rose sharply in February, by 17% compared to the previous year.

The same thing happened with ALL deposits, which increased at even higher rates, with 32% more compared to February 2017.

Kadareja argues that the depreciation of the euro, which took significant proportions in late March, may be partially linked to the expectations created by the deeuroization package.

However, according to him, the Exchange performance between the euro and the Lek in the future will depend on several fundamental factors, including the relationship between inflows and outflows of foreign currency into the economy.

The Bank of Albania’s deeuroization strategy will increase the costs of holding the euro and will lower the Lek’s prices for commercial banks.

This clearly intends to direct their activity more towards the domestic currency, discouraging further growth of deposits and loans in euros.

SCAN

*Material i përgatitur nga portali SCAN. Ripublikimi mund të bëhet vetëm kundrejt citimit të autorësisë dhe burimit origjinal.