Foreign Exchange Reserve 2007-2017

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Open Data Albania has investigated into the Foreign Exchange Reserve over the last ten years, i.e. the period 2007-2017. The Foreign Exchange Reserve is the total reserve in foreign currency kept and managed by the Bank of Albania. Such reserve serves to cover the needs of a country for foreign currency, and as a mechanism to intervene in cases of crisis. 
The purpose of such Foreign Exchange Reserve is to: a) support monetary policies and the management of the foreign currency exchange rates, including interventions to support the local currency; b) prevent vulnerability during crisis by ensuring liquidities in foreign currencies; c) maintain trust in the market by helping the country being able to cover foreign debt; d) demonstrate support for local currency against foreign assets; dh) support Government in covering its needs for foreign currencies and foreign debt ; e) maintain reserve for cases of national emergencies.

Foreign Exchange Reserve during 2007-2017 

Source: BoA
Comments and Analysis: ODA

Albania’s Foreign Exchange Reserve has doubled over the last ten years. The year when the Bank of Albania marked the biggest increase of this reserve was 2015. In 2015, the Foreign Exchange Reserve of the Bank of Albania increased by 688 million Euros (or 31.4 %) compared with the previous year.


Source: BoA
Comments and Analysis: ODA


Source: BoA
Comments and Analysis: ODA

According to the Bank of Albania, the Foreign Exchange Reserve was 2,99 billion Euros by the end of 2017 compared to 1,44 billion Euros in December 2007.  During 2017, the gross Foreign Exchange Reserve, estimated and reported in Euros, increased by approximately 50,15 million Euros, amounting to 2,99 billion Euros by the end of December.

Foreign Exchange Reserve during 2007-2017

Source: BoA
Comments and Analysis: ODA

The Foreign Exchange Reserve increased mainly as result of several national and international factors. This includes privatization of public assets, commercial relations, obligatory reserves from commercial banks kept in foreign currency, as well as from the revenues generated by the Bank of Albania from investments in the Foreign Exchange Reserve. 
Most of the Foreign Exchange Reserve, i.e. about 63.4 percent of it, is kept in Euros. The second currency is the American Dollar which makes up to 22 percent of the Foreign Exchange Reserve of Albania, followed by SDR (type of currency for international monetary reserves created by IMF in 1969 for the member states), the British Pound, and the Japanese Yen. However, part of the Foreign Exchange Reserve is kept in Gold. 
Special drawing rights (SDR) refer to an international type of monetary reserve currency created by the International Monetary Fund (IMF) in 1969 that operates as a supplement to the existing reserves of member countries.

Composition of the Foreign Currency Reserve by currency for 2017

Source: BoA
Comments and Analysis: ODA

The Bank of Albania has mainly used the Foreign Exchange Reserve to support the Ministry of Finances need for foreign currency. Thus, during 2017, transfers including debt service on behalf of the Ministry of Finances amounted to 377,42 million euros.
Net inflows from transactions of loans issued by IMF, IBRD (International Bank for Reconstruction and Development) and the renewal of short term titles amounted to 346,6 million euros. During 2017, the Foreign Exchange Reserve was not necessary to support the bank system.




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    Contributer: Open Data Albania
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