At the end of July, Albania had 5.61 billion euros in foreign exchange reserves. This is the greatest level in the history of the nation.
This is the outcome of the government’s ongoing acquisition of foreign debt as well as actions taken by the Bank of Albania to manipulate the foreign exchange market.
“Even though there isn’t a pressing need, the government keeps borrowing from outside sources despite the nation’s ample supply of euros,” Dritan Vakaj, the Director of the Association of Foreign Exchange Agencies, tells A2 CNN.
The Bank of Albania removed 188 million euros—48 million more than it had bought the previous year—from the foreign exchange market in order to manage the exchange rate. On the other hand, large foreign exchange reserves may make it more difficult for the Bank of Albania to manipulate the exchange rate when the economy has a poor absorption capacity. You’re high. Hazards exist. However, these dangers can be reduced in some ways. Purchasing financial instruments is one of them, according to Vakaj, in order to reduce currency rate risks.
The country’s foreign exchange reserves have grown by 710 million euros since July of last year, according to data from the Bank of Albania, partly due to the government’s recent Eurobond issue.”