Deposits in Albania reached the highest level in 10 months

Bank deposits rose by nearly 75 million euros in December 2018, reaching the highest level in 10 months. According to the Bank of Albania, at the end of last year the deposits reached about ALL 989 billion. This is the highest deposit value in the bank since February 2018. Deposits in the second half of 2018 showed an upward trend, despite interest rates being at minimal levels.

The banking system is extremely liquid and at the end of last year the ratio between loans and deposits was less than 54%. This proves that there are huge untapped potential to increase lending. Under the conditions when the government is also significantly reducing borrowing in the domestic market, increasing lending to the private sector, what is becoming more and more the main challenge.

Deposits in euros continue to dominate, with over 51% of the total. Despite the devaluation of the European currency against the ALL in the last two years, Albanians continue to prefer mainly euro as a currency for saving.

Apart from the psychological factor, this choice is also linked to the high degree of euroization of the real economy and the fact that most of the assets are quoted in euros. For this reason, the International Monetary Fund in its latest statement called on the government to become part of the de-euroization strategy by imposing restrictions on conducting domestic currency transactions.

SCAN

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