Why is the Albanian lek so strong? Who gains, who pays, and what nobody counts

The lek has not bought so many euros since at least 1995, when Eurostat’s records begin. In September 2026 a euro cost 91.85 lek on average, the lowest monthly figure in those records. In 2019 it cost 123.01. Put the other way round, the lek now buys 33.9% more euros than it did in 2019, and 37.7% more dollars. On the Bank of Albania’s official rate of 16 October, a euro cost 91.32 lek and a dollar 81.20.

No other floating currency has done as well since 2019. In the Bank for International Settlements’ exchange-rate data, which cover 97 currencies with figures to August 2026, the lek ranks first against both the euro and the dollar.

The government calls this a success. “The strengthening of the lek is a success for the Albanian economy,” Edi Rama, the prime minister, said on 17 July (Top Channel, our translation). We wanted to know three things. Where do all the euros come from? Who gains from the strong lek, and who pays for it? And does the official explanation account for all of the money?

Tourism is the biggest single cause, and with foreign investment it explains most of the rise. But the strong lek’s own gain has not been shared the way a stronger currency should share it: imported goods did not get cheaper, while the stronger lek cut the state’s debt ratio by about 6 points without any effort from the government. And every year since 2019 a slice of the euros coming in has gone unexplained, which the Bank of Albania has not studied.

We started with five suspicions of our own. Some held up and some did not, and we say so where they fail. Where we give our own view rather than a finding, we say that too.

Key numbers

Figure	Value	Date	Source
Lek per euro, official rate	91.32 (2019 average: 123.01)	16 Oct 2026	Bank of Albania; Eurostat
Lek’s gain against the euro / the dollar since 2019	+33.9% / +37.7%	Sep 2026	Eurostat ert_bil_eur_m
Lek’s rank among floating currencies since 2019	1st of 61	Aug 2026	BIS WS_XRU
Real appreciation over a decade	+54% (IMF: “about 53 percent”)	2015–2025	Bruegel; IMF
Tourism receipts	€5.78bn, 21.4% of GDP (2019: €2.08bn, 14.9%)	2025	IMF balance of payments
Euros bought by the Bank of Albania	€1.05bn	2025	Bank of Albania, Annual Report 2025
Unrecorded inflow (net errors and omissions)	€1.28bn in total; 0.6–1.2% of GDP a year, positive every year	2019–2025	IMF balance of payments
Non-residents’ share of lek government debt	about 2%	Jun 2026	Bank of Albania, FSR H1 2026
Debt ratio cut by the stronger lek	6.0 points of GDP (ALL 143.3bn)	2022–2025	Our calculation from Ministry of Finance and Eurostat figures
Food price level	103.8 (EU = 100); 82.6 in 2019	2025	Eurostat prc_ppp_ind_1
Imported goods (non-energy) in lek	+9.9%, against −12.2% if the lek’s gain had passed through	2019 to Sep 2026	Eurostat HICP; our calculation

A note on the numbers. A currency’s gain can be stated two ways, and both get quoted. “The lek buys 33.9% more euros than in 2019” means the same as “a euro buys 25.3% fewer lek”. In this piece, “the lek gained x%” always means the first: how many more euros or dollars a lek buys. The main comparison is with the 2019 average, before the pandemic. We check the big claims against 2015 and 2022 as well.

How strong is the lek, and how rare?

The lek is at its strongest against the euro since at least 1995, and since 2019 it has gained more than any other floating currency.

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Chart 1 shows the value of the lek in euros and in dollars, with 2019 set at 100: both lines climb from late 2022, and the euro line ends at its highest point.

The base year matters, so here are three. Measured from the 2019 average to September 2026, the lek gained 33.9% against the euro and 37.7% against the dollar. From 2015 it gained 52.1% and 57.9%. From 2022 it gained 29.5% and 41.5% (Eurostat, our calculation).

Against the dollar, the lek is not at a record. It was stronger from April to July 2008, when a dollar cost as little as 77.28 lek on average, against 79.78 in September 2026. So the fair claim is the strongest against the dollar since mid-2008.

How rare is it? We ranked every currency in the BIS data on the same footing, leaving out those pegged to the euro, the dollar or another currency in the list, or held almost flat against them. That leaves 61 floating currencies. The ranking uses BIS data to August, the latest month most currencies reach; on that basis the lek’s gain since 2019 is 32.5% against the euro, a little less than the 33.9% to September. It ranks first, ahead of the Armenian dram (+26.9%) and the Costa Rican colón (+26.0%).

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Chart 2 shows the ten biggest gains since 2019; the lek leads the next currency by about six points.

The rank depends on the window. The lek is first since 2015, since 2019 and over ten years; second since 2022, behind the colón; third over three and five years; and only 18th over the last year, because the rise slowed in 2025 before picking up again in 2026. So “the strongest currency in the world” is not right. “The biggest gainer since 2019” is.

This is a story about the lek and the euro. The euro’s own rise against the dollar explains less than a tenth of the lek’s gain on the dollar since 2019, by our split of the Eurostat figures.

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Chart 3 shows how small the euro’s own move is next to the lek’s.

The rise is large in real terms too. The real effective exchange rate, or REER, measures a currency against those of a country’s trading partners, adjusted for the difference in inflation between them. On Bruegel’s figures Albania’s REER rose 54% from 2015 to 2025, and the IMF puts it at “about 53 percent” over the decade to September 2025. In plain terms: after allowing for inflation, Albania is about 50% dearer for foreign visitors and buyers than ten years ago.

Part of a pattern, but bigger

Countries on the road to the European Union usually see their currencies gain in real terms. Albania’s real gain is within the range of the countries that joined in 2004 and 2007, but bigger than every regional peer’s since 2019.

The usual explanation is catch-up: as a poorer country grows, productivity and wages rise and local services get dearer, which economists call the Balassa–Samuelson effect. In the ten years before they joined the EU, Bulgaria’s REER rose 57%, Romania’s 79% and Slovakia’s 61%, on Bruegel’s figures. Albania’s 54% sits among them.

What is unusual is the route. A real appreciation comes either through the exchange rate or through prices rising faster than abroad, and countries with a fixed rate can only take the second route. Since 2019 North Macedonia, which fixes the denar to the euro, saw a real gain of 16.6% with consumer prices up 40.5%; Bulgaria saw 18.8% with prices up 42.0%. Albania saw 28.4% with prices up only 21.0% (2019 to 2025; Eurostat, World Bank and Bruegel figures). That is 9.6 points above the median of 11 regional currencies, and first of the 12 on every base.

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Chart 4 sets each country’s change in exchange rate against its change in prices; Albania is the only one where the exchange rate did most of the work.

Among the countries that have joined the EU since 2004 and today’s candidates, the lek’s 43% gain against the euro in the ten years to 2025 has only two matches since 1995. They are the Czech koruna in 1998–2008 (+45%) and the Lithuanian litas in 1995–2005 (+52%), which was pegged to a rising dollar at the time.

None of the institutions that watch Albania names the EU path as the cause; the IMF, the European Commission and the EBRD all point to tourism and foreign investment. Albania is also early in the process: four of 33 chapters were provisionally closed by October 2026 (European Western Balkans). How this month’s protests bear on the talks was the subject of our report of 19 October.

The warning signs of the last convergence booms are absent. Before 2008, Bulgaria and the Baltic states ran current-account deficits of 15% to 25% of GDP. Albania’s was 0.6% in 2025 (IMF balance of payments), and its private credit is about 36% of GDP (World Bank). The risk that does show is competitiveness: goods exports “fell significantly due to the appreciation of the lek”, the European Commission found (EC Albania 2025 Report), from 10.4% of GDP in 2022 to 5.8% in 2025.

One more difference matters for what follows. The countries that joined in 2004 and 2007 caught up from cheap. Albania’s price level is already high for its income. That is where the story of who pays begins.

Where the euros come from

Tourism, with steady foreign investment behind it. The central bank soaked up a large part of the surplus, and the lek still rose.

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Chart 5 shows each source of foreign currency as a share of GDP; tourism is the only one that has grown sharply.

Spending by foreign visitors, which the balance of payments records as travel credits, rose from €2.08bn in 2019 to €5.78bn in 2025, or from 14.9% to 21.4% of GDP (IMF balance of payments, our conversion to euros and to shares of World Bank GDP). Tourism alone accounts for 46% of the rise in gross foreign-currency inflows over those years.

Albanians spend money abroad too. Net of that, tourism brought in 10.1% of GDP in 2025, against 3.6% in 2019. That rise of 6.5 points of GDP accounts for almost all of the improvement in the current account, from a deficit of 7.8% of GDP in 2019 to 0.6% in 2025.

Add net foreign direct investment to the current account and you get what economists call the basic balance: the steady, long-term flows in and out of a country. Albania’s went from a deficit of 0.4% of GDP in 2019 to a surplus of 4.1% in 2023 and 4.4% in 2025. The jump in 2023, of 3.7 points of GDP, came in the year the lek rose fastest.

Foreign direct investment brought in a record €1.64bn in 2025, about 6.1% of GDP. Real estate was its largest recipient, the European Commission says. Remittances, the money Albanians abroad send home plus the wages they earn on seasonal work, were €2.27bn, or 8.4% of GDP (IMF balance of payments; the World Bank gives the same share). They are large, but they are falling as a share of GDP, from 9.5% in 2019. They are not what changed. The emigration behind them was part of our report on the Tirana protests of 15 October.

The central bank has been buying the surplus. The Bank of Albania bought €265.8m of foreign currency in 2023, €932.8m in 2024 and €1,047.5m in 2025 (Annual Report 2025), and €663.6m in the first half of 2026 (the Bank’s purchase records). Over 2023 to 2025 it bought €2.25bn, about two-thirds of the net inflow of foreign currency in those years, recorded and unrecorded (our comparison with the IMF figures).

The IMF says purchases in January to October 2025 came to 3.4% of GDP, “30 percent from regular reserve building activities and 70 percent from unscheduled interventions”. Its verdict: “In the absence of FX interventions, the lek would have appreciated faster” (IMF, 2025 Article IV). Reserves reached €7.31bn at the end of 2025.

The government did not add to the pressure. Its euro borrowing abroad went into its account at the central bank and paid foreign debt; it was not sold in the market. About 60% of the €650m Eurobond of February 2025 repaid the rest of a 2018 bond, the Bank of Albania’s Annual Report 2025 says. In 2024 and 2025 the government went the other way and bought €291m of foreign currency from the central bank (€103m and €188m).

Nor is there a big rush out of euro savings: counted in euros, euro deposits kept growing (Bank of Albania, FSR H1 2026).

Is the tourism figure believable? It is the biggest number in the story. The number of foreign citizens arriving in Albania rose from 6.41 million in 2019 to 12.47 million in 2025 (INSTAT, December 2019 and December 2025). Travel credits per foreign arrival went from €325 to €464. In lek, after Albanian inflation, that is a fall of about 8% in real spending per arrival; most of the rise in euros is the stronger lek itself. So the tourism figure has not grown faster than visitor numbers and prices would explain. What this test cannot show is whether the starting level was right. We come back to that below.

Who pays

Albanians did not get the gain a stronger lek should have given them. Imported goods did not get cheaper, food costs as much as in Germany, and part of the gain stayed with traders instead of reaching shoppers. This is not a story of falling living standards, since wages rose much faster than prices, but of who captured the strong lek.

When a currency gains a third against the euro, imported goods should get cheaper in that currency. A jacket that cost €100 in Italy in 2019 cost 12,301 lek to import; at September 2026 rates it would cost 9,185 lek. Economists call this pass-through: how much of a change in the exchange rate reaches consumer prices.

To test it, we compared Albanian prices in lek with EU prices in euros (Eurostat HICP). If Albanian prices had simply followed EU prices at the new exchange rate, non-energy industrial goods would have fallen 12.2% in lek from 2019 to September 2026. Instead they rose 9.9%. Clothing would have fallen 15.0%; it rose 9.6%. Food would have risen 4.5%; it rose 42.3%.

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Chart 6 sets, for goods Albania mostly imports, what the lek price would have done if the lek’s gain had passed through against what it did; the gap is about 20 to 29 points.

That benchmark is not a forecast. A shop price also pays for rent, wages, transport and the shop’s margin, and those local costs should not fall with the exchange rate. But they cannot explain why lek prices of imported goods rose at all, for furniture almost as fast as EU prices rose in euros, and for food faster, as if the lek had barely gained. Some of the gain did pass through: the IMF estimates that a 1% appreciation lowers headline prices by about 0.2% over a year, and durable goods rose only 5.3% in lek against 13.9% in the EU. So the honest claim is “only partly”, not “not at all”. The pattern holds from 2015 and from 2022 too.

The Bank of Albania’s own research points the same way. A 2026 working paper by two of its economists finds that “the effects are not significant for currency appreciation”, while “depreciations tend to have a more pronounced inflationary effect”. When the lek weakens, prices rise; when it strengthens, they do not fall by much. The paper’s two methods differ in degree: its baseline model finds a small but significant effect in both directions, 0.05 for appreciation against 0.08 for depreciation, and its quantile model finds the effect of appreciation negligible.

Then there is the price level. Eurostat and the OECD compare what a common basket costs in each European country. In 2025 food in Albania cost 103.8% of the EU average (Eurostat prc_ppp_ind_1): more than in Germany (102.4) or Italy (101.1), less than in France (106.8) or Austria (109.5). Milk, cheese and eggs cost 135.6%, the fourth dearest of 36 countries.

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Chart 7 shows food price levels across Europe, with the EU at 100; Albania sits next to Germany and Italy.

Albania is one of the poorest countries in Europe. Its GDP per head, adjusted for prices, was 43% of the EU average in 2025, joint second lowest of 37 countries. (The 2023 census found fewer people than earlier estimates, which pushed this figure up from 33 in 2022; the jump is partly a change in the count, not growth.) Set against income, Albanian food prices are 22.8% above what its income level would predict, the third highest gap in Europe after Iceland and Switzerland.

How did food get so dear? Not because Albanian shops raised prices faster than European ones: from 2019 to 2025, food prices in Albania rose in lek only 0.4% more than EU food prices rose in euros. But the lek gained 25.8% on the euro over those years, and that alone lifts the food price level from 82.6 to about 104. A stronger currency should have made Albanian shoppers richer at the till. It did not.

No one has published a like-for-like comparison of the same items, so we cannot test the claim that prices are higher “for the same product”; on Eurostat’s common basket, the claim about the level holds. The Competition Authority opened a review of supermarket prices in July 2026 and has published no findings yet (press notice).

Where did the gap go? Part of it shows up in traders’ gross margins: what traders keep from each sale after paying for the goods they resell. INSTAT’s business survey puts the trade sector’s gross margin at 20.8% of sales in 2022 and 23.1% in 2024, the highest in the fifteen years of data (INSTAT, SSE01). Traders kept 2.3 more lek of every 100 lek of sales, as the goods they buy, largely imported, got cheaper in lek. The timing fits the lek’s fastest rise, though the survey cannot prove the cause.

Most of that extra margin did not become profit. It paid for higher wages and other costs: traders’ net profit rose less, from 6.4% to 7.1% of sales. The survey has no product-level margins, does not separate importers from other traders, and stops in 2024. In 2026, the Bank of Albania says, the 25% rise in the minimum wage was absorbed partly by “the narrowing of businesses’ profit margins” (Monetary Policy Report 2026/III, our translation).

Tax explains part of the food premium. Albania charges the standard 20% VAT on food, and none of its reduced rates covers food (Law 92/2014 on VAT, articles 48 and 49, as amended to December 2025). Most EU countries charge reduced rates on food, such as 7% in Germany and 9% in the Netherlands, according to BalkanWeb, citing Eurostat. At a 7% to 9% rate, if the cut were passed on in full, Albania’s food price level would be about 93 to 94 instead of 103.8, by our calculation: still about 10 points above what its income predicts. On these figures VAT explains about half of the food premium, not all of it.

Fuel is a different story. Albanians pay some of Europe’s highest pump prices: Albania’s fuel price level was the fifth highest of 36 countries in 2025 (Eurostat). On 14 October 2026 the government’s cap for diesel was 213 lek a litre, about €2.33, against an EU average of €2.14 two days earlier (BalkanWeb; EU Weekly Oil Bulletin).

But since price caps came in this spring, the high price is mostly tax, not margins. A government board now fixes maximum prices from international product prices, taxes and capped trading margins (decision no. 5 of 9 April 2026); the retail margin is capped at 12 lek a litre. Taxes take 49% of the capped diesel price and 52% of the petrol price. Before tax, Albanian diesel cost about €1.18 a litre under the cap of 14 October, among the cheapest of 28 countries and below the EU median of €1.31 two days earlier; petrol cost about €0.99, below the median of €1.05.

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Chart 8 splits the diesel pump price into the price before tax, fixed taxes and VAT, for Albania and EU countries, on the capped prices of October 2026 and the EU prices of 12 October.

Albania’s fixed fuel taxes are set in lek per litre: excise of 39.38 lek (decision no. 5), a circulation tax of 27 lek, and a carbon tax of 3 lek on diesel and 1.5 lek on petrol (Law 9975/2008 on national taxes, article 4; the customs administration gives the same rates). Because the tax is fixed in lek, the strong lek has made it look bigger in euros: about €0.56 a litre on diesel at the 2019 rate, about €0.76 now, more than in any EU country. Albanians pay the same lek; what changed is how the price compares with Europe’s.

So our own suspicion, that fuel companies widened their margins, does not hold for 2026. For the years before the caps there is no official pump-price series; a rough estimate from Eurostat’s price levels puts Albania’s pre-tax price close to the EU’s.

Others pay too. Exporters lost ground; the exporters’ office ZUBE put their losses at about €34.8m in the first half of 2023 alone (Shqiptarja). €100 sent home by a relative abroad bought 12,301 lek in 2019 and 9,185 lek in September 2026, a quarter less. Savers in euros, about half of all deposits, have seen their lek value shrink. And tourism businesses, which earn in euros and pay in lek, face what the IMF calls “rising wages and asset prices”.

Now the case against our argument, which we accept. The average gross wage rose about 76% from 52,376 lek a month in 2019 to 92,150 lek in the second quarter of 2026 (INSTAT). After inflation that is a real rise of 38.7%, and 22.1% against food prices alone (our calculation with Eurostat HICP). In euros the average wage went from €426 a month to €967. On average, Albanian households have not lost purchasing power.

Our point is narrower. The strong lek should have given them a second gain, at the till, and mostly it did not. They pay German prices for food and EU prices for many imported goods out of wages of under €1,000 a month. Part of the difference stayed with traders, where most of it paid their own rising wages and costs.

The state’s quiet gain

The government does not need to push the lek up to profit from it. We found no sign that it did. But it is one of the strong lek’s biggest winners.

At the end of 2025, 40.0% of Albania’s public debt was in foreign currency, mostly euros (Ministry of Finance). When the lek rises, that debt shrinks in lek, and so does its weight against Albania’s GDP, which is counted in lek. The Bank of Albania’s Governor, Gent Sejko, said in April 2023 that the lek’s rise in 2022 alone “reduced the public debt by around ALL 37 billion” (Bank of Albania).

No official series goes beyond that year, so we made one, using the actual mix of currencies in the debt. The stronger lek cut the lek value of the debt by about ALL 143bn from 2022 to 2025. A simpler version that treats all foreign debt as euro debt gives ALL 138bn and reproduces the Bank’s ALL 37bn for 2022, so the method matches the Bank’s.

The debt ratio fell from 74.1% of GDP at the end of 2021 to 52.9% at the end of 2025, a fall of 21.2 points. About 6.0 of those points came from the exchange rate. Nominal GDP growth cut about 21.8 points, while new borrowing and other flows added about 6.6. Valued at the end-2021 exchange rate, the 2025 debt would have been about 58% of GDP instead of 52.9%. So far in 2026 the lek’s rise has cut about ALL 29bn more, about 1% of GDP.

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Chart 9 divides the fall in the debt ratio into its causes: the exchange rate is a real slice, but growth is the biggest one.

Our calculation is mechanical: a weaker lek would have raised nominal GDP too, so the true net effect is smaller than 6 points. A stronger lek also keeps imported inflation down, which the government is glad to claim.

The strong lek costs the state something too. It shrinks the lek value of imports, and with it the VAT collected at the border. Petrit Malaj, the finance minister, told parliament in November 2025 that the losses from the exchange rate were “about 7 billion lek” of import VAT in the first nine months of that year (Shqiptarja, our translation). When exporters complained in 2023, the government gave them tax relief rather than press the central bank (Shqiptarja).

Nothing we found shows the government steering the lek. The law gives the exchange rate to the Bank of Albania, not to the government (Law on the Bank of Albania, Articles 59 and 60). “The government cannot intervene in the exchange rate; it is the bank that makes monetary policy,” Malaj said in the same debate (our translation). The government’s own budget plan assumes a flat rate of 96.2 lek per euro for every year from 2026 to 2029 (Ministry of Finance). And as shown above, it kept its Eurobond money out of the market and bought euros from the central bank in 2024 and 2025.

So we change our own claim. We suspected the government wanted a stronger lek to pay down its debt. No document shows that motive, and its own actions point the other way. We think it is fairer to say that it welcomes a strong lek it did not make, and gains a great deal from it. It also gains a story. In the same remarks of 17 July, Rama said: “There is dirty money too, but where isn’t there?” (RTSH, our translation).

A bank that does not explain itself

The Bank of Albania is independent on paper and broadly endorsed by the IMF. But it explains itself far less than the Czech central bank, and on several counts less than North Macedonia’s, and it has not studied the biggest question in its own economy.

Start with the law. The Bank “shall be entirely independent of any other authority in the pursuit of its primary objective”, Article 3 says (Law on the Bank of Albania). All nine members of its Supervisory Council, the Governor among them, are elected by parliament, three on the government’s proposal. The European Commission finds the law only “partly aligned with the EU acquis on the central bank independence” (EC Albania 2025 Report). A draft new law of July 2026 keeps the same appointments, makes dismissal harder and obliges the government to recapitalise the Bank if its capital falls too low.

The Governor was re-elected in February 2022 with 103 votes of the 140 seats in parliament, far more than the governing party’s own, so his election was cross-party (Shqiptarja, 24 February 2022). We found no public evidence that the government has pressed the Bank on the exchange rate. That proves little either way: private pressure would not show in the public record.

What the Bank did is clearer. It bought euros on a large scale, about 3% to 4% of GDP a year in 2024 and 2025, to slow the lek’s rise. The IMF thinks it did too much, not too little: the Bank “should let the exchange rate adjust flexibly” (IMF, 2025 Article IV). Since January 2024 the IMF has classed the lek as “crawl-like” rather than floating, a change it explained in its 2024 review, because of those large unplanned purchases (IMF, 2024 Article IV). The lek’s rise has also cost the Bank its capital: every euro it holds loses lek value, and its capital and reserves were −ALL 5.3bn at the end of 2025 (Annual Report 2025). So our case is not that the Bank should have bought more euros. It is about policy and about openness.

On policy, the Bank’s key rate was below the European Central Bank’s from June 2023 to late 2024, the years of the lek’s fastest rise. The Governor told parliament that the slower pace of rate rises in 2023 “reflected the exchange rate strengthening and the consolidation stance of fiscal policy” (address of 18 July 2024): the lek was doing part of the tightening. The rate has been 2.50% since July 2025. The Bank’s own estimate of the neutral rate, the rate that neither speeds up nor slows down the economy, is 4.5% to 5.5% (IMF, 2024 Article IV). The IMF, whose staff put the neutral rate lower, at 3.6%, calls the current rate “neutral on an ex-post basis and marginally accommodative on an ex-ante basis” (IMF, 2025 Article IV).

Meanwhile credit to the private sector grew about 14% in the year to June 2026 (15.4% in July and August), and house prices rose 10% (FSR H1 2026). Limits on mortgage borrowing came only in mid-2025. Inflation was 3.3% in July and August, above the 3% target. On 7 October the Governor said that the forecasts and the upside risks to inflation “strengthen the case for a response in the direction of tightening” (statement, our translation). By its own yardstick, policy has stayed loose through a credit and housing boom.

On openness, the record is plain. The Bank publishes no minutes of its policy meetings and no record of how its members vote. The Czech National Bank publishes the vote with each decision (CNB). The Bank of Albania’s English monetary policy reports stop at 2023, and its English financial stability reports at the first half of 2024. It publishes the size of its euro purchases but does not explain the unplanned ones.

A local tax consultancy, ALTAX, put the question bluntly in October: “Where is the criterion that separates market stabilization from deliberate exchange rate suppression?” (ALTAX). In 2024 the Bank wrote that its interventions “were focused on preserving the stability of the exchange rate between the lek and the euro” (de-euroisation report, August 2024, our translation). That reads like a target for the rate, which sits oddly with a currency the Bank calls free floating.

Table 10. What three central banks tell the public

Item	Bank of Albania	Czech National Bank	National Bank of North Macedonia
Minutes of rate decisions	Not published	Published for every meeting, usually 8 days later	Not published (press releases only)
Vote split	Not published	Published with each decision, plus a voting record	Not published
English Monetary Policy Report	Stops at 2023	Current (summer 2026), four a year	Lags (latest in English: February 2026)
English Financial Stability Report	Stops at the first half of 2024	Current (spring 2026), two a year	Annual; latest in English covers 2024
Reports between quarterly reports	Interim reports (March, July, October) not published	A statement with reasons and the vote ratio, then minutes, for each of 8 meetings	Published (“Recent Macroeconomic Indicators”)
FX interventions	Volumes only; no stated thresholds for unscheduled purchases	Monthly data on its own FX trades since 1997	Direction only, no amounts
Research papers, 2020 to 2026	24 (own series)	87 working papers	13 working papers (2020 to 2025)

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Source: the three central banks’ websites and RePEc/IDEAS listings (which can miss papers), checked 19 October 2026; compiled by The Macro Notebook. CC BY 4.0, The Macro Notebook.

The Czech National Bank publishes far more on every count. North Macedonia’s bank, like Albania’s, publishes no minutes or votes and says less about its interventions, but keeps its English reports more current and publishes between quarterly reports.

Its research tells the same story. The Bank’s research series lists 24 papers from 2020 to 2026, against 8 to 10 a year in 2009 to 2013 (Bank of Albania); the Czech National Bank published 87 working papers in the same years (RePEc listing, which can miss some). The Bank of Albania’s last study of what drives the lek dates from December 2020, before the big rise, and we found nothing it has published on flows that the statistics cannot place. The main model-based study of the lek’s rise was written by the IMF.

The case for the Bank is real. Inflation fell from 6.7% in 2022 to 2.2% in 2024; the Bank began raising rates in March 2022, four months before the ECB; the European Commission calls Albania’s policy mix “overall appropriate”; and its mortgage limits were carefully set on its own estimate of house-price overvaluation. That is not a bank without capability. It is a bank that does not show its working, and that has left the most awkward question unasked.

The money nobody counts

Laundering through property is documented by every official body that has looked at Albania. An unexplained inflow of euros shows up in the official figures every year. How much of it is criminal, and how much it moves the lek, nobody has measured.

This is the part of the story we care most about, so we separate what the official record says, what the data can see, and what we think.

What the official record says

The official record on laundering is strong. The US State Department lists Albania among the “major money laundering jurisdictions”, a list it says is “not a ‘blacklist’”, and says: “Criminals launder proceeds through real estate purchases, construction projects, virtual assets, and business development” (INCSR 2025). The Council of Europe’s anti-laundering body, MONEYVAL, found in 2018 that real estate posed “a very high risk for ML” (MONEYVAL). The Global Organized Crime Index says Albania’s construction sector “is heavily infiltrated by illicit funds, resulting in market distortions” (GI-TOC, 2025). Albania’s own Financial Intelligence Agency lists “high value investments in real estate with an unknown or uncorroborated source of funds” as the first warning sign in its 2025 report (FIA).

The gaps in the law are documented too. The Financial Action Task Force kept Albania on its grey list from February 2020 (FATF) to October 2023 (FATF), longer than its action plan needed, because of a 2022 draft amnesty for undeclared assets, the European Commission says. A criminal amnesty in April 2024 pardoned 40 people convicted in the anti-corruption courts (EC 2024). And of the “fiscal peace” law of December 2025, the IMF warned of “concerns related to the effectiveness of the AML/CFT system”, and Albania’s own intelligence agency of “an increased risk that certain clients may misuse the voluntary declaration procedure to legalise funds originating from criminal offences” (FIA guidance, our translation).

Enforcement is thin. Albania confiscated about €10m of criminal assets in 2024 (EC 2025). Construction companies filed no suspicious activity reports at all in 2024, and real-estate brokers filed five; banks filed 718 of the 1,632 (FIA, 2024). So the data does not support the idea that banks as a whole look away. The weak gatekeepers are builders, agents and exchange offices.

Prosecutors describe a cash channel. These are official actions, not findings of guilt, and we name no suspects. Klodian Braho, a prosecutor at SPAK, Albania’s anti-corruption prosecution office, described to BIRN an investigation in which licensed exchange offices served drug groups; in one case prosecutors “traced and seized cryptocurrencies valued at $11.5 million” (Balkan Insight, 27 October 2025).

In May 2026 anti-mafia prosecutors in Bari and SPAK obtained precautionary measures against 14 people over “an organised group based in Tirana dedicated to the international laundering of cash from Italy to Albania” (Avvenire, our translation). Citizens.al reports SPAK’s preventive seizures in Tirana building projects suspected of drug financing at about €140m, noting that “these are preventive seizure measures, not convictions with final confiscations” (Citizens.al).

So prosecutors in two countries say criminal cash enters Albania and some of it ends up in buildings. No court has yet ruled on these cases, and nothing on the record says how big this money is next to the currency market.

What the data can see

Every balance of payments has a line for money that cannot be placed, called net errors and omissions. If more foreign currency ends up in Albanian banks and the central bank’s reserves than the recorded flows explain, the difference shows up here as a positive number, mixing honest errors with money nobody declared.

Albania’s has been positive every year since 2019: €103m in 2019, rising to €252m in 2023 and €236m in 2025, €1.28bn in seven years, or 0.6% to 1.2% of GDP a year (IMF balance of payments). It was negative in 2017 and 2018.

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Chart 11 shows net errors and omissions by year since 2015, and splits the net inflow of 2023 to 2025 into its recorded and unexplained parts. It is a net figure: money recorded by mistake inside tourism or remittances would not show here.

Is that small or large? Against tourism it is small: the seven years together come to about a fifth of one year’s receipts. But the lek rises because of the net surplus the market has to absorb, which is much smaller than gross inflows.

From 2023 to 2025 the unexplained inflow came to €626m. That is about 18% of the whole net inflow of foreign currency in those years, the basic balance plus the unexplained money. Against the euros the Bank of Albania had to buy it is about 28%, though that share swings from 95% in 2023 to 15% in 2024 and 23% in 2025. So it is about a fifth of the net inflow, or more than a quarter of what the Bank had to buy: not small next to the money that lifts the lek.

What we cannot say is what share of it is criminal. Cash brought home by emigrants, tourism income nobody declared, and plain errors all land in the same line.

Two facts limit how much laundering can move the lek. First, Albanian property is priced and largely paid in euros. The Bank of Albania said so itself in 2006: “the housing market is in Euro. So the part of the inflows of the foreign exchange used for housing are not converted in the market” (Bank of Albania, 2006). A laundered euro that buys a flat priced in euros never touches the lek; only the builder’s lek costs, and the seller’s later conversion, reach the currency market. Second, tourism grew far more. Net tourism receipts were €2.23bn a year higher in 2025 than in 2019, about nine times the largest yearly unexplained inflow.

The Bank of Albania has answered the question once, in public. In an article for Monitor magazine in February 2024, Governor Sejko named “the presence of high informal EUR inflows” as “the primary hypothesis” in the public debate. He rejected it because the volume of currency trading “has been and remains below the reported volume of foreign trade in goods and services” (Bank of Albania). He wrote that “our analyses do not identify other sources that have materially impacted the performance of domestic foreign exchange market”.

That test is too coarse to settle it. Albania’s trade in goods and services came to about €19.9bn in 2024 (IMF balance of payments). Even a conversion of half a billion euros a year would be about 2.5% of that, too small to show up in such a comparison. And the Bank has not published the data behind the test.

Some things no public data can see: cash recorded inside the tourism and remittance estimates, cash changed at exchange offices, euro banknotes coming in, the currency in which property deals are paid. The tourism test we ran above has a weakness here. The Bank estimates travel receipts from a quarterly sample survey at the border, grossed up by the number of travellers; its metadata also say travel was “based mainly on the number of travelers and indexed average expenditure and duration of stay of previous years”, without saying for which years (Bank of Albania metadata). Either way, spending per visitor comes from the Bank’s own survey, which it does not publish, so our test cannot show whether its level is right.

If that level were too high, the tourism figure would be too high, and unrecorded money of the same size could sit inside it without showing up as an error. Nobody outside the Bank can check this. Arithmetic gives a sense of scale. To hide €2bn inside the 2025 tourism figure, real spending per foreign arrival would have to have fallen about 40% since 2019, not the 8% the published figures show; to hide €1bn, about 24%.

Two more figures are setting, not proof. Lek cash outside banks was 18.3% of GDP in 2025, about three times North Macedonia’s share (IMF data), but the ratio fell in 2023, the year the lek rose fastest. And in the first half of 2026 about 58% of homes sold by agents and builders were bought with bank loans, according to Albanian Daily News’s report of the Bank of Albania’s survey of property sellers; the rest, and the deposits, came from savings and cash whose origin the statistics do not show.

What others say

Outside the official bodies, some go further. Irena Beqiraj, a former deputy finance minister, told Radio Free Europe’s Albanian service: “For me, 25 to 40 percent of the lek’s appreciation remains unexplained by tourism, foreign investment and remittances” (Radio Evropa e Lirë, 26 July 2026, our translation). She has not published a method, and we cannot reproduce her figure; her range fits the data only if it is measured against the net surplus rather than against all inflows.

A BIRN journalist, Gjergj Erebara, wrote in an opinion column that the construction boom “was fuelled mainly from laundered drug money”, without showing the evidence (Balkan Insight). The Global Initiative Against Transnational Organized Crime links lek strength “not entirely explained by macroeconomic fundamentals” to illicit inflows (GI-TOC, 2024), and a 2025 study for the Friedrich-Ebert-Stiftung makes a similar link. Opposition leaders say the same, but, Radio Free Europe reported, presented no concrete evidence.

The cautious voices matter as much. Reporters for New Eastern Europe wrote that “no one provided concrete evidence” of the laundering allegations they heard everywhere in Tirana (New Eastern Europe); the Italian research centre OBCT found such suspicions “have rarely been substantiated through concrete criminal proceedings” (OBCT). And the Basel AML Index 2025 rates Serbia and Bosnia and Herzegovina as riskier than Albania.

What we think

We do not expect official bodies in Albania to name crime as a cause of the lek’s rise, even if it were one. So their silence proves little either way. Our view, which the data does not prove, is this. Laundered money is a real and under-measured part of the lek’s rise. Prosecutors in Albania and Italy say criminal cash enters the country and is placed through exchange offices and building projects. The official figures leave an unexplained inflow of euros every year since 2019: in 2023 to 2025, about 18% of the net foreign-currency inflow and about 28% of what the Bank of Albania had to buy. We think some of that is criminal money, alongside cash remittances and tourism income nobody declared.

But we no longer think it is the biggest factor. On the recorded flows, it is not the main one. For that, the tourism figures would have to be billions of euros too high. Public data can neither confirm nor rule that out, and only the Bank of Albania can check it. It has not published that check.

What would prove us right, or wrong:

• Foreign card spending in Albania. If it matches the tourism estimate, the room for hidden money in that line shrinks; if it falls far short, the tourism figure is too high.
• Banks’ and exchange offices’ cash purchases of euros, by month and region. Peaks outside the season, or in places without tourists, would point to other cash.
• Net shipments of euro banknotes out of Albania by its banks. Large and rising shipments would mean large cash inflows.
• The currency and method of payment in property deals, from notaries or the State Cadastre Agency.
• A forensic review of the border surveys behind the tourism and remittance figures, and the Bank’s own series on currency trading with clients.
• Pump-price build-ups for the years before the caps, which would settle the fuel question too.
• MONEYVAL’s next report on Albania, due at its plenary in December 2026 after an on-site visit in April (Council of Europe).

Apart from MONEYVAL’s report, none of this is public today; the Bank of Albania holds most of it.

Two explanations that do not hold

We looked for big funds behind the lek and did not find them. And the dollar did not rise because central banks bought it. Something survives of each idea, and we keep it.

Big funds

If foreign funds were betting on the lek, they would hold lek government bonds. Non-residents held about ALL 20bn of them in June 2026, about €0.2bn and about 2% of lek government debt, a share unchanged for a year (Bank of Albania, FSR H1 2026). We found no sign that lek bonds are in any major bond index, and they trade about ALL 100m a month, the IMF says, too little for a big fund. Currency trading follows trade: over the last decade it ran at about 70% of trade in goods and services, with a correlation of 96% (Bank of Albania, Annual Report 2025).

The interest-rate motive fails on timing. A carry trade borrows in a low-rate currency to hold a higher-rate one. But in 2023 and 2024, the years of most of the lek’s gain, the Bank of Albania’s key rate was below the ECB’s deposit rate, by 0.3 and 0.6 points on average (Bank of Albania decisions; ECB via FRED). Holding lek paid less than holding euros.

What survives: the IMF’s model finds that sentiment-driven capital flows, portfolio inflows “caused by a risk-on episode”, added about 11% to the lek’s real rise since 2021, though “the precise numbers are subject to uncertainty” (IMF Selected Issues, page 8, paragraph 12). The model does not say who supplied that money. Albanians shifting their savings into lek are the likeliest candidate, but nobody has measured it. It does not point to a fund.

The dollar

US inflation rose first; the dollar followed the Fed. In 2021 US inflation went from 1.4% to 7.2% while the broad dollar index rose only about 4%. The dollar’s big rise came in 2022, as the Fed raised rates faster than anyone else, and it fell back from late 2022 while inflation was still high (FRED; BLS via FRED). In 2022 foreign central banks were selling dollars, not buying them. Dollar reserves reported to the IMF fell by $713bn from the end of 2021 to September 2022, partly because bond prices fell (IMF COFER); Treasuries held at the New York Fed for foreign central banks, at face value, fell by $141bn in 2022 (Federal Reserve via FRED); and Japan alone sold dollars for ¥9.19tn that autumn to defend the yen (Japan’s Ministry of Finance).

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Chart 12 shows US inflation climbing in 2021 and the dollar rising only when the Fed raised rates in 2022. The latest point is September 2026, when US inflation was 3.7%.

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Chart 13 shows foreign central banks’ Treasury holdings at the New York Fed falling in 2022 while the dollar climbed.

The dollar rose because of the Fed, because the energy shock hurt Europe and Japan far more than the US, and because in a crisis investors and the many firms that borrow in dollars scramble for them (New York Fed; IMF Blog). That last pull comes from the dollar’s role as the world’s main currency, so part of our original idea survives, as private demand rather than central-bank buying (FEDS Notes). And because most US imports are priced in dollars, the strong dollar did little to cool US inflation, which was made at home: “only 0.16 percentage points annualized as of June 2022”, the Kansas City Fed estimated.

Our verdict

Each explanation, what we found, and how sure we are. “Strong” means official data or an official finding says it directly. “Moderate” means the data is consistent with it, with some inference. “Weak” means it rests on inference or a single source. “Speculative” means it is plausible but no evidence was found. “Contradicted” means the data points the other way.

Explanation	What we found	How sure	Key source
Tourism is the main driver	Travel credits up from 14.9% to 21.4% of GDP, 2019–2025; 46% of the rise in gross inflows	Strong	IMF balance of payments
Foreign investment, much of it in property, adds steady inflows	FDI about 6% of GDP; real estate the largest recipient	Strong	IMF; European Commission
The EU path explains it	Real gain within the range of earlier entrants; no institution names accession as the cause	Strong (the range); Weak (the cause)	Bruegel; IMF; EC
The government steers the lek to cut its debt	Eurobond money kept out of the market; the government bought euros in 2024–25; no document shows the motive	Contradicted (its motive: Weak)	Bank of Albania; Ministry of Finance
The government gains from the strong lek	About 6 points off the debt ratio, 2022–2025; it welcomes the rise	Strong (the gain); Moderate (welcomes it)	Our calculation from Ministry of Finance figures; Rama, Malaj
The Bank of Albania lacks independence	Law only “partly aligned” with the EU; the Governor’s 2022 election was cross-party; no evidence of pressure found	Strong (the legal gaps); Weak (dependence on the governing majority)	European Commission; Bank of Albania law
The Bank explains itself too little and has not studied the question	No minutes, no votes, English reports years behind; no study of the lek’s drivers since 2020, none on unrecorded flows	Strong	Bank of Albania
The Bank kept policy too loose	Rate 2.50% against its own neutral estimate of 4.5–5.5%; credit about +14%, house prices +10%	Moderate	IMF; Bank of Albania
The Bank lacks capability	Careful mortgage limits; the IMF agrees with its diagnosis	Weak	IMF
Laundering through property is a serious problem; criminal cash enters through exchange offices and construction	US State Department, MONEYVAL, GI-TOC, Albania’s own FIA; prosecutors’ actions in Albania and Italy, not rulings	Strong (the problem); Moderate (the cash channel)	INCSR 2025; MONEYVAL 2018; BIRN; Avvenire
Unrecorded inflows add materially to the surplus	Positive every year since 2019; in 2023–2025, about 18% of the net inflow and 28% of the Bank’s purchases; their criminal share is not measured	Moderate (mainly criminal: Weak)	IMF balance of payments; Bank of Albania
Laundering is a factor in the lek’s rise; it is the biggest factor	Our view: the residual and the cash cases support it, euro pricing limits it. As the biggest factor it would need the tourism figure to be billions too high, which public data cannot confirm or rule out	Weak (a factor); Contradicted on the recorded flows (the biggest)	as above
Banks look away	Banks file the most suspicious activity reports; builders and agents file almost none	Weak	FIA
Big funds move the lek	Non-residents hold about 2% of lek debt; carry was negative when the lek rose fastest; sentiment-driven money added about 11%, source unknown	Contradicted (funds); Moderate (sentiment-driven money)	Bank of Albania; IMF
Imported goods did not get cheaper; food costs as much as in Germany	Non-energy goods +9.9% in lek against −12.2% with full pass-through; food 103.8 (EU = 100); real wages up 38.7%	Strong (households lost purchasing power: Contradicted)	Eurostat; INSTAT
Traders’ margins widened; fuel companies’ margins explain pump prices	Trade gross margin 20.8% to 23.1% of sales, 2022–2024, profits up less, narrowing in 2026; under the 2026 caps about half the pump price is tax	Strong (gross margins); Moderate (profits); Contradicted (fuel margins under the caps)	INSTAT; Weekly Oil Bulletin; Transparency Board
The dollar rose because central banks bought it	Central banks sold dollars in 2022; US inflation was made at home	Contradicted (made at home: Strong)	IMF COFER; Federal Reserve; Kansas City Fed

What would change our minds

These releases could move the verdicts above. We will update the piece, and say what changed, when they come out.

• The Bank of Albania’s rate decision on 3 November 2026 and its Monetary Policy Report 2026/IV on 12 November.
• The European Commission’s next annual report on Albania.
• MONEYVAL’s sixth-round report on Albania, due at its December 2026 plenary.
• The next US State Department report on money laundering.
• The joint IMF and World Bank review of Albania’s financial sector.
• The Competition Authority’s findings on supermarket and fuel prices.
• The balance of payments for the third quarter of 2026.
• And the data listed at the end of the laundering section.

A note on speculation

Most of this piece rests on official data and official findings. Some of it is our view, and we have said so where it is: above all, that laundered money is a real part of the lek’s rise, and that the government welcomes a strong lek it did not make. Those are hypotheses, with the evidence for and against set out above. Where we quote others’ views, they are theirs, and we say how much weight they carry. Nothing in this piece accuses any named person or company of laundering money, evading tax or profiteering. Where prosecutors have acted, the measures described are charges and preventive seizures, not convictions. This is not investment advice.

Methodology and data

Exchange rates. The lek’s gain is the change in how many euros or dollars a lek buys: (lek per euro in the base period ÷ lek per euro at the end) − 1. Headline figures and Chart 1 use Eurostat monthly averages (ert_bil_eur_m; dollar rates are cross rates through the euro), to September 2026. The main base is the 2019 average of monthly averages, with 2015 and 2022 as checks. The latest Bank of Albania official rate appears in the text only. The lek’s gains in 2023 and 2024 were not concentrated in the tourist season, but the Bank’s own summer purchases make the monthly pattern hard to read.

The ranking. One dataset, BIS WS_XRU monthly averages, to August 2026, the latest month most currencies reach; that is why the ranking shows the lek up 32.5% against the euro since 2019, against 33.9% on Eurostat’s figures to September. A currency’s change is its value in August 2026 against its average in the base year; the order is the same against the euro and the dollar. Of the 96 currencies in each ranking (97 with data, less the base currency), 35 are left out. The rule: a currency is left out if it is pegged to the euro, the dollar or another currency in the set, or if its average monthly move against the euro or the dollar since January 2019 is below 0.15%. The first test removes the currencies pegged to the euro or the dollar, and the Brunei dollar, Bhutanese ngultrum, Lesotho loti, Namibian dollar and eswatini lilangeni, pegged to other currencies in the set. The second catches currencies held almost flat, among them the Maldivian rufiyaa, the Trinidad and Tobago dollar, the Serbian dinar and the Nicaraguan córdoba. That leaves 61. With every peg included, the lek’s ranks do not change. The IMF classes the lek itself as “crawl-like”, a managed regime, but the lek moved about 0.65% a month on average, more than four times the threshold, and by about a third in all. Ranks over other windows, on September data and on daily data to 12 October 2026, are checks.

Real exchange rates. Bruegel’s CPI-based real effective exchange rate, 120 trading partners, annual averages. Bruegel’s latest months rest on forecast inflation, so 2025 is the last firm year.

The ledger. All inflows and outflows come from the IMF’s balance of payments database (BPM6), compiled by the Bank of Albania, converted from dollars to euros at Eurostat annual averages, with shares of World Bank GDP. The current account is taken from the same source throughout (−0.6% of GDP in 2025). The basic balance is the current account plus net foreign direct investment. Net errors and omissions catch unrecorded money only if it ends up in recorded foreign assets, such as bank deposits abroad or the central bank’s reserves. Money recorded by mistake inside another line, such as tourism or remittances, does not show there. The Bank of Albania’s purchases come from its Annual Report 2025 (annual totals) and its intervention records (months and 2026). The intervention records give €1,027.0m for 2025, against €1,047.5m in the Annual Report; we use the Annual Report.

Debt. The valuation effect in each year is the foreign-currency debt at the end of the previous year times the change in the end-of-year exchange rate, from Ministry of Finance debt figures and Eurostat rates. The central estimate, used in the text and in Chart 9, uses the actual currency mix (euro, dollar, and loans in the IMF’s special drawing right valued through its currency basket): ALL 143.3bn, or 6.0 points of GDP, over 2022–2025. As a check, treating all foreign debt as euro debt gives ALL 137.7bn (5.9 points) and reproduces the Bank of Albania’s own figure for 2022 (ALL 37bn). It is a mechanical calculation and overstates the net effect, since a weaker lek would also have raised nominal GDP.

Pass-through. The benchmark is the change in lek prices that would follow if Albanian prices tracked EU prices in euros at the current exchange rate: (1 + EU price change) × (1 + change in lek per euro) − 1. It is a benchmark, not a forecast, because shop prices include local costs.

Price levels. Eurostat-OECD price level indices compare a common basket, not identical products. Price levels for candidate countries carry more uncertainty than for EU members. Albania’s GDP per head breaks in 2023, when the census cut the population count.

Real wages. INSTAT’s average gross wage (PTM011) deflated by Albania’s HICP over the same periods, 2019 average to the second quarter of 2026; a quarterly figure against an annual one carries some seasonality.

Fuel. The build-up of the capped pump price uses the Transparency Board’s caps, the excise in its decision, the circulation and carbon taxes in Law 9975/2008 and VAT at 20%; the figures in the text use the cap of 14 October 2026, and the EU figures are the Weekly Oil Bulletin’s of 12 October. The estimate for the years before the caps applies Eurostat’s fuel price level for Albania to the EU’s average pump price and removes VAT and the fixed taxes at each year’s exchange rate.

What we could not measure: the share of the unexplained inflow that is criminal; whether the base level of spending per visitor in the tourism estimate is right; cash conversions at exchange offices; euro banknote flows; the payment currency of property deals; product-level margins; observed pump prices before the 2026 caps; the investors behind the IMF’s sentiment-driven flows.

Data and licences. Every chart has a CSV of exactly what it shows. Our charts, calculations and CSVs are released under CC BY 4.0, The Macro Notebook; the data keep their own terms. Charts and CSVs built on IMF data say “Data © IMF, reused under the IMF’s terms; not covered by our CC BY 4.0 licence”. Those built on INSTAT data say the same of INSTAT and carry “Processing and visualisation: The Macro Notebook, based on data from INSTAT”. Bank of Albania and Ministry of Finance figures appear in the text only; Chart 9 shows our calculation, with the Ministry of Finance credited for the inputs. Translations from Albanian and Italian are ours. Corrections will be logged at the top of the piece with the date.

How to cite

[Author], “Why is the Albanian lek so strong? Who gains, who pays, and what nobody counts”, The Macro Notebook, [date], version of [date], [URL]. Charts and CSVs: CC BY 4.0, The Macro Notebook, except where the data’s own terms say otherwise (IMF and INSTAT data, as above).

Further data

This appendix keeps material that the main piece leaves out for length: four more charts, three points of detail, and the full verdict table. The grades follow the same definitions as in “Our verdict”.

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Chart A1 lines up each country’s real effective exchange rate on its year of EU entry (for Albania, Serbia and North Macedonia, on 2025). Albania’s line climbs about as steeply as Bulgaria’s and Slovakia’s did in the decade before they joined (Bruegel). It shows that the size of the real gain is not unusual for a country on the road to the EU; what is unusual is that it came through the exchange rate.

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Chart A2 sets the Bank of Albania’s policy rate against the ECB’s deposit rate, month by month. The gap was negative in 2023 and 2024, by about 0.4 and 0.6 points on average in these monthly figures (0.3 and 0.6 on the exact decision dates), the years of most of the lek’s gain (ECB via FRED). A carry trade, borrowing euros to hold lek, would have lost money on the interest alone.

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Chart A3 counts the papers in the Bank of Albania’s research series by year: 8 to 10 a year in 2009 to 2013, 24 in all from 2020 to 2026 (Bank of Albania). The Czech National Bank’s working papers are shown for comparison (RePEc listing, which can miss some).

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Chart A4 follows Albania’s food price level (EU = 100) from 82.6 in 2019 to 103.8 in 2025 and splits the rise into two parts. Lek food prices rose only 0.4% more than EU food prices in euros; the lek’s 25.8% gain on the euro accounts for the rest (Eurostat prc_ppp_ind_1; Eurostat HICP). Eurostat changed its basket in 2022, which the chart marks.

The calendar

On average since 2015, the lek gains on the euro from April to July and loses ground in January and September, the pattern a tourism-driven currency should show. In 2023, the year of the steepest rise, 35% of the year’s gain came in June to September, and in 2024 26% (our calculation from Eurostat monthly averages). Those four months are a third of the year, so the gain was not concentrated in the season, but nor was it pushed out of it. The Bank of Albania’s own purchases are also seasonal, with its large direct purchases of 2024 in May and June, which blurs the monthly pattern. We draw no conclusion from it either way.

Laundering elsewhere

Laundering has moved prices elsewhere. An expert panel in British Columbia estimated in 2019 that laundered money made house prices there “3.7 percent to 7.5 percent higher” than they would otherwise be (Government of British Columbia). Albania’s property market is far smaller relative to the money that may flow into it. Colombia in the 1990s is the closest case of drug money lifting a floating currency (Global Drug Policy Observatory, quoting the US Drug Enforcement Administration), but its drug trade was far larger relative to its economy. And Montenegro, which uses the euro, shows that a property boom fed by foreign money can happen with no currency of its own to move (World Politics Review).

The Bank’s story and its research: a hypothesis

This point is weak, and we give it as a question, not a finding. The Bank of Albania presents the strong lek as a help against inflation: appreciation, the Governor told parliament in 2024, “helped in mitigating imported inflationary pressures” (address of 18 July 2024). Its own working paper finds that an appreciation passes through to prices weakly, small in one model and negligible in the other (Bank of Albania). The two may well fit together: import prices can fall with the lek while overall prices barely move. We suspect the Bank’s public account leans more on the strong lek’s help with inflation than its research supports, but it has not published a reconciliation, and we would not put more weight on the point than that.

The full verdict table

Explanation	What we found	How sure	Key source
Tourism drives most of the rise	Travel credits up from 14.9% to 21.4% of GDP, 2019–2025; 46% of the rise in gross inflows; net tourism +6.5 points of GDP	Strong	IMF balance of payments
Foreign investment, increasingly in property, adds steady inflows	FDI about 6% of GDP; real estate the largest recipient	Strong	IMF; European Commission
The EU path explains it	Real gain within the range of earlier entrants; no institution names accession as the cause	Strong (the range); Weak (the cause)	Bruegel; IMF; EC
The government steers the lek to cut its debt	No sign of it; Eurobond money kept out of the market; the government bought euros in 2024–25	Contradicted	Bank of Albania; Ministry of Finance
The government wants a strong lek to cut its debt	A motive no document shows	Weak	—
The government gains from the strong lek	About 6 points off the debt ratio, 2022–2025; it welcomes the rise	Strong (the gain); Moderate (welcomes it)	Our calculation from Ministry of Finance figures; Rama, Malaj
The Bank of Albania lacks independence	Law only “partly aligned” with the EU; all Council members elected by parliament, but the Governor’s 2022 election was cross-party	Strong (the legal gaps); Weak (dependence on the governing majority)	European Commission; Bank of Albania law
The government pressed the Bank on the exchange rate	No evidence found in the public record	Weak (no evidence found)	—
The Bank of Albania explains itself too little	No minutes, no votes, English reports years behind, unplanned purchases unexplained	Strong	Bank of Albania
The Bank of Albania has not studied the question	No study of the lek’s drivers since 2020; none on unrecorded flows; research output halved	Strong (the counts)	Bank of Albania; RePEc
The Bank of Albania kept policy too loose	Rate 2.50% against its own neutral estimate of 4.5–5.5%; credit about +14% (15.4% in July–August 2026), house prices +10%	Moderate	IMF; Bank of Albania
The Bank of Albania lacks capability	Careful mortgage limits; the IMF agrees with its diagnosis	Weak	IMF
The Bank’s public account and its research disagree	It presents the lek as a help against inflation; its own paper finds appreciation passes through weakly; no reconciliation published	Weak (a hypothesis)	Bank of Albania
Laundering through property is a serious problem	US State Department, MONEYVAL, GI-TOC, Albania’s own FIA	Strong	INCSR 2025; MONEYVAL 2018
Criminal cash enters through exchange offices and construction	Prosecutors’ actions in Albania and Italy; charges and seizures, no court rulings	Moderate	BIRN; Avvenire
Unrecorded inflows add materially to the surplus	Positive every year since 2019; in 2023–2025, about 18% of the net inflow and about 28% of the Bank’s purchases	Moderate	IMF balance of payments; Bank of Albania
The unrecorded inflows are mainly criminal money	Prosecutors’ cases show the channel; nothing measures the share	Weak	—
Laundering is a factor in the lek’s rise	Our view; the residual and the cash cases support it, euro pricing limits it	Weak	as above
Laundering is the biggest factor	Not on the recorded flows; it would need the tourism figure to be billions too high, which public data cannot confirm or rule out	Contradicted (on the recorded flows)	IMF balance of payments; INSTAT
Banks look away	Banks file the most suspicious activity reports; builders and agents file almost none	Weak	FIA
Big funds move the lek	Non-residents hold about 2% of lek debt; carry was negative when the lek rose fastest	Contradicted	Bank of Albania; IMF
Some sentiment-driven money added to the rise	About 11% of the real rise since 2021, source unknown	Moderate	IMF
Imported goods did not get cheaper	Non-energy goods +9.9% in lek against −12.2% with full pass-through, 2019–2026	Strong	Eurostat HICP
Food costs as much as in Germany, in a poor country	Food 103.8 (EU = 100); GDP per head 43; 20% VAT explains about half of the premium over income	Strong (the level); Moderate (the VAT share)	Eurostat
Households lost purchasing power	Real wages up 38.7% from 2019 to mid-2026; up 22.1% against food prices	Contradicted	INSTAT; Eurostat
Traders’ margins widened as the lek rose	Trade gross margin up from 20.8% to 23.1% of sales, 2022–2024, a 15-year high; net profit up less, 6.4% to 7.1%	Strong (gross margins); Moderate (profits)	INSTAT
Margins keep widening today	The Bank of Albania says margins narrowed in 2026	Weak	Bank of Albania
Fuel companies’ margins explain pump prices	Under the 2026 caps, about half the price is tax; pre-tax prices at or below the EU median; before the caps, a rough estimate puts pre-tax prices near the EU’s	Contradicted (under the caps); Weak (before them)	Weekly Oil Bulletin; Transparency Board
The strong lek makes fixed fuel taxes look bigger in euros	Fixed lek taxes on diesel worth about €0.56 a litre at the 2019 rate, €0.76 now; Albanians pay the same lek	Strong	Law 9975/2008; Transparency Board
The dollar rose because central banks bought it	Central banks sold dollars in 2022	Contradicted	IMF COFER; Federal Reserve
US inflation was made at home	The strong dollar cut it by only 0.16 points	Strong	Kansas City Fed

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