The effect of the pandemic on the exchange rate – BoA intervened in March to curb the fall of the ALL
The Bank of Albania sold 20.4m euros at the end of March to stop the rapid devaluation of the lek against the euro. The outbreak of the Covid-19 epidemic caused a panic in the foreign exchange market and the Albanian lek depreciated against the euro by about 7% within a few weeks. This caused the Bank of Albania to intervene twice in the market on 27 and 30 March, by selling foreign currency for more than 20 million euros.
At the same time, the Bank of Albania is continuing to purchase the euro during this year, in order to increase the foreign exchange reserve. According to the official calendar, 17 auctions are planned for this year. In the first quarter of 2020, two auctions were organized, in which a total of 13.7 million euros were purchased. This amount is relatively low compared to the average purchase for this purpose in recent years. But, apparently, this happened precisely because of fluctuations in the exchange rate in March.