The Euro/Lek exchange rate is experiencing further decline this week. According to the official exchange rate of the Bank of Albania, the Euro was exchanged today for 91.4 Lekë, the lowest level of all time.
The continuous decline of the Euro since the first quarter of this year has significantly accelerated the pace of the annual decline of the European currency.
Since the beginning of the calendar year, the Euro-Lek exchange rate has fallen by 5.5%, while on an annual basis the decline has reached 5.7%.
Agents believe that the exchange rate is continuing to fall, due to the inertia of the summer season that has brought large foreign exchange inflows, while demand for the European currency appears weak.
The depreciation of the European currency seems to have started to reduce its use in asset transactions in the domestic market, such as in the real estate market. Meanwhile, deposits in Euro are also growing at a slower pace, suggesting a kind of increase in the public's preference to keep savings in the domestic currency.
These factors tend to further strengthen the downward trends in the Euro exchange rate, which, in general, have been ongoing for more than a decade, driven by trends of structural improvement in the external position of the Albanian economy.
This long-term improvement can be explained by the increase in tourism revenues and the expansion of services exports, with the increase in foreign direct investment, especially in real estate, but also partly by a significant role perceived to be played by informal foreign exchange inflows.
Bank of Albania statistics show a significant improvement in the Balance of Payments in the first half of this year. For the first 6 months of 2026, the current account deficit decreased, with a total value of 361 million euros or 40.6% less compared to the same period last year.
The current account deficit for the first 6 months also marked the lowest level since 2018. The reduction in the deficit came mainly from the increase in services exports and remittances. The balance in services trade was positive at approximately 1.79 billion euros, up 12.9% compared to the first half of last year.
More than half of the contribution to the services sector came from tourism, which in the first 6 months of the year brought the economy net income worth 957 million euros, up 20% compared to the first half of last year.
The strong growth in foreign direct investment also appears to have had an additional effect on the overall balance. Bank of Albania data show that for the second quarter of 2026, the value of foreign direct investment reached 741 million euros, an increase of 86% compared to the same period a year earlier.
This growth was significantly influenced by flows related to a significant development project in the real estate sector. For the entire first 6 months, the total value of foreign direct investments reached 1.144 billion euros, an increase of 50% compared to the same period last year.
Also, an additional effect seems to be exerted by the large fiscal surplus, which is reducing the supply of Lek in the market.
For the first 8 months of 2026, the budget was in surplus at the value of 61.6 billion lek, an increase of 52% compared to the same period a year earlier./Monitor.al/
