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Tourism or rooms full of euro cash?! The euro has lost 35% of its value since 2016

2026-11-11 17:45:22Biznes SHKRUAR NGA REDAKSIA VOX

Tourism or rooms full of euro cash?! The euro has lost 35% of its value since

The euro is once again approaching its historic low in the domestic market, continuing its decline in November, even though the peak tourist season has long since ended.

According to the official exchange rate of the Bank of Albania, one euro was exchanged today for 90.72 lekë, losing 0.03 lekë compared to the day before.

This is one of the lowest historical levels of the common currency, only 0.08 lek away from the record of 90.64 lek, which was recorded on October 22 of this year.

The decline is sharp compared to 2016, when the long cycle of strengthening of the Lek began. According to data from the Bank of Albania, on January 18, 2016, the Euro reached the level of 139.48 Lek, the highest of that year. At today's exchange rate, the European currency has lost 48.76 Lek, or almost 35% of its value against the Lek.

In other words, 1 thousand euros, which in January 2016 was worth about 139.5 thousand lek, today is exchanged for only 90.7 thousand lek, or 48.8 thousand lek less.

For years, the strengthening of the Lek has been explained by official institutions mainly with the growth of tourism, the inflow of foreign investment and the improvement of the fundamental factors of the economy. But the history of the decline of the Euro is longer than the tourism boom and not all developments are easily explained by official indicators.

Balance of payments data published by the Bank of Albania, which measures foreign exchange inflows and outflows from sources such as emigration, tourism, foreign trade, etc., show that during the period 2016–2022, when Albania had not yet entered the current tourism boom, the current account deficit worsened, while the Euro continued to lose value. The deterioration was mainly due to the trade deficit, with the country becoming increasingly dependent on imports while exports were hit by the decline of the Euro. In 2022, net foreign exchange outflows from the country were around 1.1 billion euros, or 37% more than in 2016, but the European currency had depreciated by around 13% during the same period.

Normally, a worsening external deficit would put pressure on the domestic currency to weaken, not strengthen. However, in Albania the opposite happened.

The Euro’s decline appears to have had a stronger connection to the boom in building permits than to the number of tourists, at least until 2024, when accurate data on permits is reported. According to INSTAT, the area of ​​building permits reached record levels of 2.1–2.7 million square meters per year during the period 2021–2024, while the Euro continued to depreciate, falling from an average of 137.4 lek in 2016, to 119 lek in 2022 and 100.7 lek in 2024.

Meanwhile, the improvement in the balance of payments from tourism inflows began to become visible only from 2023, when the current account deficit decreased to 374 million euros. In 2024, this deficit worsened again, reaching 610 million euros, but the Euro lost another 8% of its value against the Lek. Only in 2025, when the current account deficit narrowed to 178 million euros, did tourism inflows become a more important factor supporting the strengthening of the local currency.

For exporting businesses and those that generate revenue in Euro, the continued depreciation of the European currency has reduced revenues expressed in Lek, at a time when domestic costs, especially wages, continue to increase. On the other hand, consumers have not benefited to the same extent from the reduction in import costs.

Ten years after the start of the decline, the question remains as to how much of this performance is explained by tourism and real economic factors and how much by foreign exchange flows that are not fully reflected in official statistics./ Monitor

Tourism or rooms full of euro cash?! The euro has lost 35% of its value since

 


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