We were already focused on the uncertainties that the US election could trigger on financial markets. But we did not have to look that far, as the European elections and the resulting snap elections in France increased the risks for the euro, in line with the motto: “We have euro risks at home”. This development boosted safe havens such as the US dollar and the Swiss franc, helping them to strengthen against the euro. Riskier assets, such as the Polish złoty, lost ground. On the other hand, the rouble is struggling with different issues: US sanctions are sending the Russian currency down a path of uncertainty. Meanwhile, we can observe a strong Albanian lek and Serbian dinar in SEE. This issues features
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Caution, adaptive stance, and data dependency remain the keywords for the monetary policy of ECB, the Fed and in the CE/SEE region. For CE central banks this means fewer cuts in Czechia, and Hungary in H2 vs H1, possibly even no cuts in Poland. For SEE this approach implies easing in small steps only, leaving the key rates at still elevated levels. |
The Bank of Albania (BoA) has signalled a shift in its foreign exchange policy, exhibiting a more interventional approach to curb lek appreciation against the euro. |
Fitch started covering Kosovo with a BB-, stable rating, amid a resilient credit profile and regional tensions. The resolution of the conflict with Serbia could propel its rating higher, aligning with its stable fiscal policies, manageable debt, and robust banking sector. However, Kosovo geopolitical uncertainties influence its standing compared to neighbouring peers. |
Albania's 2023 growth story boasts a vibrant tourism sector, with visitor arrivals soaring. However, a closer look reveals a tale of two halves. While tourism fuels growth, a lingering question emerges: is the full economic picture being captured? A high statistical discrepancy suggests significant activity might be hidden, particularly within the informal tourism sector. Can Albania address these challenges and ensure sustainable growth in the future? |