According to the Bank of Albania statistics, at the end of 2023, the country’s hard currency reserves amounted to 5.85 billion Euros. Thus, the value of hard currency reserve assets has increased by 18% or 895 million Euros compared to the end of 2022.

The hard currency reserve is an important instrument to amortize possible shocks, related to both the current account deficit and the high level of Euroization of the financial sector in the country. Also, the hard currency reserve can serve as an instrument to support the financial sector with liquidity in foreign currency or to stabilize shocks in the foreign exchange rate.

The increase of the hard currency reserve is realized mainly through purchases of hard currency in the domestic foreign exchange market. During the year 2024, the Bank of Albania has foreseen a total of 20 auctions for the purchase of hard currency./p.s./

According to the BoA, this was the second auction for June, after the one held on June 7, when the Bank of Albania bought another 6.4 million Euros.

Foreign currency purchases by the Bank of Albania are made for the purpose of foreign exchange reserve management and are not intended to affect the exchange rate.

However, with the new regulation, which has entered into force this current year, the Bank of Albania may invite foreign exchange bureaus to auctions to exert appreciating pressure on the euro exchange rate against the lek.

Experts explain the strengthening of the lek during this period mainly by the seasonal factor. The summer season brings an increase in foreign exchange supply in the market, mainly related to tourism. /j.p/p.s./