TIRANA, July 8 /ATA/ – Gent Sejko, governor of the Bank of Albania, said on Wednesday that the continued appreciation of the Albanian national currency lek reflects structural improvements in the country’s external balance and rising foreign currency inflows.
Addressing a parliamentary committee, Sejko said Albania’s external position improved significantly in 2025, supported by higher revenues from tourism, remittances and foreign direct investment, particularly in the real estate sector, which brought billions of euros into the economy.
He said that, under Albania’s free-floating exchange rate regime, it is natural for the national currency to strengthen as the economy continues to expand at around 3.8% and is supported by sustained foreign currency inflows.
“Under a free exchange rate regime, the exchange rate cannot be predicted with certainty,” Sejko said. “The experience of other European countries shows that during the process of European Union integration, when economies grow and foreign currency inflows increase, national currencies tend to appreciate.”
Sejko said the stronger lek has helped curb inflation, the central bank’s primary objective, although he acknowledged that the currency’s appreciation has weighed on exporters and on businesses and households earning income in euros.
“Prices would have been even higher if the national currency had depreciated,” he said. “From a macroeconomic perspective, containing price growth through a stronger lek has positive effects for both businesses and citizens.”
Sejko also argued against adopting a fixed exchange rate regime, saying it would have adverse consequences for the economy.
“If Albania had a fixed exchange rate, inflation would not be 2.6% but around 6%,” he said. “Loan repayments, non-performing loans and unemployment would all be higher, while macroeconomic indicators overall would be significantly weaker.”
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