The euro-lek exchange rate continues to fall and is approaching the 90-lek mark. According to the official exchange rate of the Bank of Albania, the European currency was exchanged today at 90.64 lek, the lowest level ever recorded. On an annual basis, the euro-lek rate has fallen by 6.2%. The euro is depreciating at the fastest pace in the last three years.
Foreign exchange market experts believe that the continuous fall of the euro is the result of a shift in the balance between supply and demand. Inflows in euro continue to rise, driven especially by tourism and foreign investment. On the other hand, demand for the euro appears increasingly weak, which can partly be explained by the decline in public confidence in the European currency, after a depreciation cycle that has lasted for more than a decade.
This is also being reflected in a shift in the pricing of real estate toward the domestic currency. Meanwhile, lending to the economy is also increasingly oriented toward the lek, especially in the individuals segment, gradually reducing demand for foreign currency to pay loan installments. Even the turbulence caused by the protests of recent weeks has not led to an increase in domestic demand for the euro, as may have happened during periods of political or economic uncertainty in the past. The Bank of Albania assesses that, in general, the fall in the euro rate can be explained by developments in the external position of the economy.
For the first half of 2026, the current account deficit fell by almost 41% compared with the same period last year and simultaneously reached its lowest level since 2018. The decline in the deficit came mainly from the growth of service exports and remittances. The increase in foreign direct investment is also having an impact on the overall balance of payments. For the first six months of 2026, the total value of foreign direct investment reached 1.144 billion euro, a 50% increase compared with the same period last year.
Faced with increased pressure on the exchange rate, the Bank of Albania has further increased its currency purchases this year. According to information on interventions in the money market, during the second quarter of this year the Central Bank bought a total of 524 million euro, a figure 224% higher than the same period a year earlier. Adding the 139.6 million euro bought at the auctions in the first quarter, the total value of purchases for the first six months of 2026 has reached 663.6 million euro.
Purchases in the first half of 2026 follow the trajectory of large currency purchases by the Bank of Albania starting in 2024. In the 2024-2025 period, purchases exceeded two billion euro. Last year alone, the Bank of Albania bought 1 billion and 27 million euro on the domestic market. /Monitor/