Sejko: The strengthening of the lek is supported by tourism, investments and remittances
The Governor of the Bank of Albania, Gent Sejko, stated that the appreciation of the lek reflects the structural improvements of the Albanian economy and the increase in foreign exchange flows, emphasizing that this is a development related to the positive performance of the external balance.
While reporting to the Parliament's Committee on Civic Initiatives, Cooperation and Institutional Oversight, Sejko said that "during 2025, the external balance has improved significantly, supported by increasing revenues from tourism, remittances and foreign direct investments, mainly in the real estate sector, which have brought billions of euros to the economy."
The Governor emphasized that, under the conditions of a free exchange rate regime and an economy that continues to grow at a rate of around 3.8%, it is normal for the national currency to continue to strengthen.
"We cannot have predictability of the exchange rate, as we operate with a free regime of it. The experience of other European countries shows that during the process of integration into the European Union, when the economy grows and foreign exchange inflows increase, the national currency tends to appreciate," said Sejko.
He assessed that the strengthening of the lek has a positive impact on controlling inflation, which remains the main objective of the Bank of Albania.
"Of course, the appreciation of the lek has negative effects for exporters and for citizens or businesses that have their income in euros, but on the other hand, the beneficiaries are those who have their income in lek. Prices would be even higher if the national currency had been devalued. From a macroeconomic point of view, curbing price increases through strengthening the lek has positive effects for businesses and citizens ," he said.
The governor also argued that a fixed exchange rate regime would have more severe consequences for the economy.
"If we had a fixed exchange rate, inflation would not be 2.6%, but around 6%. Loan installments would increase, the level of non-performing loans, unemployment and overall macroeconomic indicators would be worse, " Sejko concluded.
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