BoA explains how it has slowed down euroization

BoA explains how it has slowed down euroization

Institutions and individuals who make cash transactions must use lek more than the euro. This was the appeal issued last year by the Bank of Albania, associated with concrete measures to prevent the “invasion” of the domestic economy by the European currency, which also led to a significant depreciation of the euro. Bank of Albania has reported in Parliament about the measures it has taken to slow down the euroization of the country.

The report started with a document dated 7 February 2018, which set out special rules which would boost the use of domestic currency in the banking system and the request addressed to banks to propose borrowers an alternative loan in lek as opposed to euro. On the other hand, Bank of Albania also reports on the interventions made last year in the money market to stop the euro’s drastic depreciation against lek. According to this institution, such interventions have enabled stability of prices. “Despite a freedom of the money market, interventions have been effective in stopping volatilities”, experts also explain. According to them, this effect has helped all economic players to make fewer financial looses thanks to the recovery of the euro.

Konfindustria: 2019 will be a difficult year for Albanian economy

Economic growth in 2019 may not exceed 3% of Gross Domestic Product. This gloomy forecast, which is lower than the forecast made by the government and IMF, has been made by business organization, Konfindustria. According to this organization, 2019 is expected to be a difficult one for the Albanian economy. “The main risks relate to low manufacturing and high imports of electricity as a result of the long drought, but also the significant decline in foreign investments following the completion of a number of important projects such as TAP, hydropower plant of Devoll, etc. The fact that several public-private partnerships have been abandoned also contributes to this”.

 Central Bank is optimistic about economic growth this year

 “Forecasts about economy this year are positive and they suggest that economic growth will continue to be high”. This is the prediction made by the Bank of Albania on the economic developments this year, in contrast to the business sector which seems to be less optimistic than the central banking institution. Meanwhile, BoA also says that inflation is expected to remain within targets in 2020.