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The fall of the euro even after the tourist "boom", money laundering... or?

2023-11-13 13:29:28Biznes SHKRUAR NGA REDAKSIA VOX

The fall of the euro even after the tourist "boom", money

The lek continues to "sink" the currency. Even the week we just ended spoke of an appreciation of the lek against foreign currencies, and especially against the common European currency.

According to the official exchange rate of the Bank of Albania, the Albanian currency was exchanged for 104.42 euros. This is also the lowest level since August 25, when the European currency recorded the highest value at 110.58 ALL, after a disappointing performance during the tourist season. Meanwhile, the US dollar has easily regained ground, being exchanged at 97.84 ALL, but remains at low values.

The appreciation of the lek against currencies was explained by the high arrivals of the latter during a successful tourist season. But, although this has already been left behind, the performance of the euro continues to decline day by day.

What is really happening to the euro?

The questions raised with the start of the fall of the euro at the start of the tourist season were many for the economics specialists. One of the problems they saw was the increase of informal money in the market. This point was left in silence, with the excuse that it is the tourist "boom" that has overvalued the lek. But now that the season is over, the issue of money laundering, or informality in the economy, comes to light again. Specialists of this sector tell Vox News that informal money, or its circulation outside the banking system, is the real problem that is being encountered in the economy. The sector that is seen as the most problematic in informal circulation is construction. Despite the "punitive" measures taken in recent months by the Albanian government, this sector also generates informality and money laundering. For experts, the strengthening of the lek in this way makes unjustifiable what is happening in the economy, and according to their logic, the informal channeling of money is what is causing the devaluation of the euro. The rapid development of the construction and real estate sector, according to experts, shows distortions that go against the rules of the market, who further argue that the country will become more expensive and Albanians risk remaining poorer. In this type of parallel movement of the construction market, the deformation of the market has also occurred, thus leading to an increase in informality and an unusual appreciation of the local currency.

Export, another sector that is at risk from the devaluation of the euro  

Export entrepreneurs see the strengthening of the lek as a concern for them, as this sector is the first echelon to take the hit. This is due to the fact that because they receive the income in euros and within the month they have to pay in lek. They have to pay salaries in lek, they have to pay taxes in lek, they have to pay electricity in lek and every other product that they buy in the country. Experts in the field of economy say that the consequences of the strengthening of the local currency in the export sector can be reflected in the lack of liquidity and the inability to invest, while other businesses around them also risk being affected.

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