Albania’s currency, the lek, surged to a record high against the euro on May 6, according to data from the Bank of Albania.

The rise of the lek against the European single currency was supported by seasonal inflows from tourism, rising foreign investment and Albania’s tight fiscal policy,

As of May 6, the euro was trading at ALL97.99, its lowest level since euro notes and coins began circulating in 2002. The exchange rate fell by ALL0.21 from the previous day and has declined by 1.3% over the past month.

Currency analysts quoted by Monitor.al said the euro’s recent slide is in line with seasonal patterns observed in previous years. During the same 30-day period last year, the euro weakened by 1.9% against the lek, and by 1.7% in 2023.

While the euro typically weakens against the lek in the lead-up to the summer tourist season, this year’s appreciation appears to be even stronger than last year’s. 

Albania saw an increasing number of visitors in the early part of the year, particularly on weekends, boosting foreign currency inflows.

In addition to tourism, foreign direct investment (FDI), particularly in real estate, has become a key driver of hard currency inflows in recent years.

Albania’s fiscal policy has also played a role in the lek’s appreciation. Government data show a budget surplus of nearly ALL34bn at the end of the first quarter, up 4% from the same period in 2024. The surplus limits the availability of domestic currency, adding further upward pressure on its value.

The appreciation of the lek has had an impact on Albania’s economy making exports such as clothing and footwear less competitive. 

With inflation remaining below the central bank’s 3% target, further intervention by the Bank of Albania cannot be ruled out. The central bank bought a record €933mn in foreign currency purchases in 2024, a 249% increase from the previous year, in an effort to mitigate excessive appreciation of the lek.