PRESS RELEASE
Governor Sejko meets with representatives of business associations of exporters

On 8 May 2023, the Governor of the Bank of Albania, Mr Gent Sejko, held a meeting with the representatives of business associations of exporters to discuss the concerns raised by them regarding the strengthening of lek against the euro.

This meeting was held in the framework of cooperation and round-table discussions to: assess their concerns; be informed on the situation; and bring forth alternatives and instruments which could be coordinated with the financial industry. The meeting was also attended by the Minister of Finance and Economy, Ms Delina Ibrahimaj, and other representatives of the Ministry of Finance and Economy (MoFE), as well as high officials of the Bank of Albania (BoA).

The exporters were represented by Mr Zak Topuzi, the Albanian Tourism Association, Mr Lumtor Shkreli, Albanian Industrialists Guild, Mr Edvin Prence and Mr Florjon Zekja, Pro-eksport Albania Association, Mr Filip Gjoka, Association of Medicinal and Aromatic Plants.

At the beginning of this meeting, Governor Sejko highlighted that Albania follows a free-floating exchange rate regime, for many years now. Pursuant to this regime, the Bank of Albania does not trade currency at a fixed exchange rate, although it follows its performance very closely.

As regards the appreciative trend of the domestic currency, according to analysis, the Bank of Albania argues that this reflects the structural improvement of the Albanian economy and its financial markets. This is witnessed by the strengthening of the external position of the economy and a higher public trust on the national currency.

Next, the Governor added that the foreign exchange market has functioned smoothly in the past two years, by showing neither speculations nor distortions, which suggests that the appreciation of the domestic currency is an event determined by real-life economy, not the financial market.

The strengthening of the exchange rate has contributed in the stability of the financial balance sheets of borrowers in foreign currency, by providing a direct positive impact on both the non-performing loans ratio and the financial stability of Albania.

Additionally, the appreciation of lek against the euro, has not hindered the growth of Albanian exports. On the contrary, it has helped to control inflation, which has resulted and still remains the lowest in the region, thus helping in preserving the purchasing power of Albanian households. Consequently, Albania had one of the highest economic growth rates across the region during 2022.

On the other hand, the Bank of Albania remains engaged in creating a monetary and financial environment which is safe, stable, and transparent and serves the sustainable economic development.

The Bank of Albania invited the exporters to be prudent regarding their business strategies and plans, as well as to establish close cooperation with the financial industry, which provides the necessary instruments that protect them against these risks.

“Since some time now, our banking sector has been providing the instrument of future contracts, which provide protection against abrupt and undesirable volatilities in the exchange rate. The Bank of Albania is engaged in helping with training and expertise on how to use these instruments” - stated the Governor.

The representatives of the business associations of exporters assessed that this meeting was quite worthwhile, and the response of the Bank of Albania and the MoFE regarding the issues raised, was immediate. They addressed both institutions, requesting a potential cooperation and assistance under present conditions.  Meanwhile, the industries themselves have started to undertake measures to mitigate the impact of the euro depreciation in their business performance.

Both institutions (BoA and MoFE) are committed to follow and monitor, at a close range, the exchange rate situation, and its impact on the exporting sector. The Governor emphasized that the bridges of cooperation will remain open, and the institutions will follow the necessary steps in accordance with the legal framework in force. The Bank of Albania and the Ministry of Finance and Economy will continue their joint efforts to buffer the fiscal situation and to enable cooperation with the banking system.

In conclusion, they agreed to hold a joint meeting between these associations and the Albanian Association of Banks, in order to assess the situation, and to investigate possibilities for further cooperation.