The main purpose of the reserves is:
(a) Support and maintain confidence in the policies for monetary and exchange rate management including the capacity to intervene in support of the national currency; (b) Limit external vulnerability by maintaining foreign currency liquidity to absorb shocks during times of crisis or when access to borrowing is curtailed and in doing so; (c) Provide a level of confidence to markets that a country can meet its external obligations; (d) Demonstrate the backing of domestic currency by external assets; (dh) Assist the government in meeting its foreign exchange needs and external debt obligations; (e) Maintain a reserve for national disasters or emergencies.
Foreign Exchange Reserves in million EUR
Source: Bank of Albania, statistical report
Comment and analysis: ODA
Source: Bank of Albania, statistical report
Comment and analysis: ODA
Reserves were 2,191.7 million EUR in 2014, compared to 1,204.2 million EUR in 2005, so an increase of 82%. The increase in the level of reserves has multiple factors, internal and external like: privatization, trade relationships, commercial bank required reserves for foreign exchange deposits, the income from the reserve investment, etc.