Over 250m euros in savings leave the banking system for a few months

At the end of May, the total stock of money and currency deposits dropped to $968 billion, dropping by nearly $10 billion, or 1% compared to the previous month (70% of the decline came from contracting currency savings). This is the lowest deposit level since July 2015. Compared to the end of last year, the savings of Albanians in banks have dropped by 33.4 billion dollars, or about 250m euros. This five-month drop has come from both the bank and currency deposits. Money savings fell by 15 billion dollars, while currency savings reduced 18.5 billion dollars.

While the contracting of currency deposits has produced the effect of devaluation of the euro (which, on average in the first five months of the year, was exchanged by 130 leks -- from about 135m in the same period a year ago -- the drop in deposits in domestic currency has largely come from lowering the savings of cash-term individuals. The steady decline in the interest rates of deposits, which came after the Bank of Albania's facilitating monetary policy to lower the cost of money and promote investments, has caused individuals to stop viewing banks as a lucrative alternative to deposit their savings.

As the Bank of Albania's basic rate dropped from 5.25% in September 2011 to about 1% currently, even deposit interests have dropped to less than 1% for annual savings. In search of larger profits, individuals have gone into longer-term investments, or the purchase of valuable government cards. Money savings continue to dominate, accounting for 52.6% of the total deposits Albanians have at the end of May. In November 2015, for the first time, currency deposits (where they predominate euros) for the first time, and this tendency has continued to become stronger, and despite the Bank of Albania's strategy to lower the euro's use level in the economy, the common currency continues to remain the favourite savings. /Albanian. com/