Albania – Bank of Albania statistics: Albania’s lek is the most stable currency in the Balkans – UPDATED

On 13 November the Albanian Broadcasting Corporation’s “ABC News” reported that statistics of the Bank of Albania (Banka e Shqipërisë) indicate that the Albanian lek has been the most stable currency in the Balkans in recent years, depreciating only 11% with respect to the euro over the last three years, while other regional currencies have depreciated up to 50% or more against the euro over the same period.  According to Bank of Albania statistics, the Serbian dinar has had the greatest depreciation against the euro of any currency in Europe, declining 55% against the euro just since 2010.  Speaking to ABC news, Mr. Arjan Kadareja, a member of the supervisory council of the Bank of Albania, attributed this stability of the lek to inflows of European money into Albania, as well as to a strong monetary policy on the part of the Bank of Albania.

Source: Leku, monedha më e qëndrueshme në Ballkan (2012-11-13 21:15)

Related: Interview of Mr. Kadereja in the studios of ABC News: Arjan Kadare Intervista Abcnews 13 Nentor

Analysis: The statements given in the article are manifestly untrue.  The Balkans region consists of former Yugoslavia, Albania, Greece, Bulgaria, and a part of Turkey.  In this area four jurisdictions use the euro (Slovenia, Montenegro, occupied Kosovo, and Greece), and seven use their own currencies: Croatia (kuna), Bosnia and Herzegovina (mark), Serbia (dinar), Macedonia (denar), Albania (lek), Bulgaria (leva), and Turkey (lira).  Of these seven, Bulgaria, Macedonia, and Bosnia and Herzegovina have maintained a very tight peg to the euro since its introduction in 2002 (continuing in each case an earlier peg to the Deutsche Mark), so that, whether “over the last three years” or “since 2010”, these three currencies have had a total change of less than 1% with respect to the euro.  Croatia’s monetary policy involves a somewhat looser peg to the euro, so that the Serbian dinar, the Albanian lek, and the Turkish lira are the only currencies of the Balkans that do not attempt to follow the euro.  The following table indicates the rates of depreciation (or in some cases appreciation) of the various currencies vs. the euro “over the last three years” and “since 2010” (using data for 13 November 2010):

Ratio of euro to local currency

(1 € = ___ units of local currency)

	Rate on 2009-11-13	Rate on 2010-11-13	Rate now (2012-11-13)	Depreciation over 3 years	Depreciation over 2 years
Croatian kuna	7.285053	7.369140	7.531102	3.27%	2.15%
Bosnia & Herz. mark	1.955830	1.955830	1.955830	0%	0%
Serbian dinar	94.4696	107.1064	112.1405	15.76%	4.49%
Macedonian denar	61.1662	61.5733	61.5050	0.55%	-0.11%
Albanian lek	137.64	139.41	139.59	1.40%	0.13%
Bulgarian leva	1.95583	1.95583	1.95583	0%	0%
Turkish lira	2.2002	1.9577	2.2848	-3.85%	14.32%

Sources: Exchange rate databases at the websites of the individual central banks:

Croatia: Hrvatska narodna banka – Tečajna lista – Arhiv (using “srednji”, i.e., mid-market rate)

Bosnia and Herz.: Centralna banka Bosne i Herzegovina – Kursna lista

Serbia: Народна банка Србије – Курсна листа (using “средњи курс”, i.e., mid-market rate)

Macedonia: Народна банка на Република Македонија – Курсна листа

Albania: Banka e Shqipërisë - Kursi zyrtar i këmbimit

Bulgaria: Българска народна банка - Фиксирани валутни курсове

Turkey: Türkiye Cumhuriyet Merkez Bankası - Döviz Kurları (using average of published buying and selling rates for coins)

As is clear from the above data, over the last three years among currencies in the Balkans the lek’s stability versus the euro has only exceeded that of the Serbian dinar, the Turkish lira, and the Croatian kuna.  And if the time frame is extended to five or ten years then the data will show that the Albanian lek falls behind the Croatian kuna as well.

Mark Pleas

Eastern Europe Banking & Deposits Consultant

[contact]