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Central Bank urges Albanians to stay calm, Lek losses 3 per cent in two days
Tirana, Sept. 24, 2009 (AE) Albania’s Central Bank governor Ardian Fullani tried to calm Albanians cough by panic on Thursday, due to the fast depreciation of local currency Lek in the domestic market. “Markets should stay calm. What is happening has no economic bases. The Lek will continue to be our currency for many-many years,” Fullani said in an unscheduled press conference.
Lek has depreciated sharply during the last two days loosing some 3 per cent. Some experts believe that the depreciation was either a market speculation or a panic. Some believe that Prime Minister Sali Berisha undermined public confidence by declaring last week that “we should surrender to the Euro”. Few minutes before the Central Bank’s declaration, the Minister of Finance Ridvan Bode urged Albanians to believe in their national currency. During a speech in parliament, Bode said: “Albanians should believe in Lek because it is the strongest currency in the region and has been stable during the last ten years.”
Albanian currency Lek lost more then 3 per cent in the past two days causing panic in Tirana. The Euro exchange rate changed to 138.6 lek in early morning on Thursday, or 1.7 per cent higher then Wednesday. In midday, the Lek was quoted at 137.8, 1.1 per cent lower then Wednesday.
The Albanian currency has been under harsh pressure during the whole of 2009, mainly due to strong government expenditures and lower levels of remittances. Its value has diminished by 12 per cent since January.
The government has increased its expenditures by 25 per cent year on year till August while its revenues increased by only 5.5 per cent. Its cash deposit in the central bank diminished to 7 billion lek in August, the lowest level in a year. Some experts think that in the next few months, the government finances pose a real risk for the country’s macroeconomic stability.
Albanian Lek has shown stability toward the Euro since 2004, fluctuating between 120-126 Lek per Euro.
