About 34 percent of Albanians hold euros in cash. The percentage of people who prefer to keep the euro ready increased in 2020 according to a survey conducted by the Central Bank of Austria last year in 10 countries in the Central, Eastern, and Southeastern European region.
The preference for holding cash marked an increase in all countries of the region, due to fears fueled by the pandemic. But Albania along with Poland, the Czech Republic and Northern Macedonia showed high levels of the population choosing to hold euro cash.
The results of the survey showed that in Albania, during 2019-2020, the preference of respondents to keep euro cash marked an increase of 4 percentage points compared to the period 2017-2018.
During the last two years of the survey, the number of people holding cash marked the highest percentage since the first survey of 2017-2008 conducted by the Central Bank of Austria.
In the last survey, the amounts of euro cash per person increased. An Albanian holds an average of 130 euros in cash in 2019-2020, from about 83 euros in 2017-2018.
Experts who have conducted the survey are seeing a growing trend for holding cash euros in SECEE countries. According to them, this tendency indicates a lack of confidence in the banking system (in particular a perceived lack of deposit security) is a key factor in explaining the strong preference of individuals to keep part of their foreign currency savings outside banks.
"Experiences of past banking crises exacerbate this effect. Moreover, weak institutional frameworks, e.g. The poor quality of legal enforcement, as well as low penetration of banks, are important factors that explain the strong preference for ready-made euros,” the survey results say.
Monetary statistics show that a significant part of household deposits in banks are in foreign currency, mainly in euros.
The Central Bank of Austria conducts a Survey on the population over 15 years of age in 10 Eastern and Southeastern European countries, such as Bulgaria, Croatia, the Czech Republic, Hungary, Poland and Romania, and four EU candidate countries, Albania, Bosnia, Northern Macedonia and Serbia.