The euro has started the week with another decline against the Albanian lek, reaching a new historic low and intensifying concerns about the impact of the strong domestic currency on exporters and other sectors of the economy.
According to the official exchange rate published by the Bank of Albania, the euro was traded at 94.89 lek on Monday, marking the lowest level ever recorded for the European currency against Albania’s national currency.
The Euro-Lek exchange rate has fallen by approximately 1.9% since the beginning of 2026, while the annual decline has reached 3.2%, reflecting sustained pressure in the foreign exchange market.
Currency exchange operators attribute the latest drop largely to the beginning of the summer tourism season, which traditionally brings a significant inflow of foreign currency into the country. The increase in the supply of euros has further strengthened depreciation pressures that had already been evident since the first quarter of the year.
Beyond tourism revenues, analysts point to the growing role of foreign investment, particularly in Albania’s booming real estate sector. Data from the Bank of Albania show that real estate accounted for 43% of total foreign direct investment during the first quarter of 2026, the highest share ever recorded.
Foreign direct investment reached €404 million in the first three months of the year, setting a new record for a first quarter and representing an 11.6% increase compared with the same period in 2025.
Investment in real estate alone is estimated to have reached €174 million during the quarter, also a historic high. The sector has become one of the main drivers of foreign currency inflows into the Albanian economy, contributing to the strengthening of the lek.
However, the rapid growth of real estate investment has also generated scrutiny. Prosecutors recently announced the discovery of an alleged money-laundering scheme linked to the construction and property sector, with several prominent developers reportedly under investigation. The case has reignited debate over the extent to which informal and illicit funds may be influencing the property market.
Market sources indicate that the Bank of Albania continues to intervene regularly in the foreign exchange market by purchasing euros in an effort to slow the appreciation of the lek. Although the volume of euro purchases made during 2026 has not yet been disclosed, the interventions have so far failed to fully offset the currency’s strengthening trend.
Between 2024 and 2025, the central bank purchased more than €2 billion from the domestic foreign exchange market in an attempt to ease pressure on the euro.
The situation presents policymakers with a difficult balancing act. Inflation has now reached the central bank’s target of 3%, making additional interventions more challenging because injecting more lek into the economy could further fuel inflationary pressures.
At the same time, a stronger lek helps reduce the cost of imported goods and can partially offset inflation. However, it also creates growing difficulties for exporters, tourism operators receiving payments in foreign currency, and businesses that rely heavily on euro-denominated revenues.
As tourism inflows accelerate and foreign investment continues to break records, the euro's decline may continue to test the limits of Albania’s monetary policy while reshaping the country's economic landscape.