BoA’s foreign reserve hits 3 bln euro threshold
Albania’s foreign reserve has amounted to nearly three billion euros last year.
According to data from the Bank of Albania, in the last four years, foreign exchange reserves have grown steadily.
The total amount has increased by about 50% since 2013, when it totaled about two billion euros.
According to the Bank of Albania, the foreign reserve at the end of 2016 covered approximately 7.2 months of imports.
The main purpose of the foreign exchange reserve is to cover the emergency needs that an economy may have for foreign currency.
Foreign exchange reserves can also be used in cases of sharp exchange rate fluctuations, which may be a concern for the macroeconomic stability of the country in question.
However, the Bank of Albania intends to increase this reserve, something that will also serve the stability target of the financial system.
This decision came as a result of the high level of euroization of the financial system and, in particular, due to the significant increase in euro deposits over the last two years.
The Bank of Albania plans to purchase up to EUR 56 million this year, in order to increase the foreign exchange reserve.
There are seven auctions that started in April, with a planned purchase interval from three to eight million euros for each auction.
In the second auction of the second quarter, however, the amount purchased was higher than the forecasts.
Only in the second quarter of this year, the Bank of Albania has bought around 18 million euros.
SCAN
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