Albania economy toward official euroisation

Erjola Barbullushi () and Senida Boshti ()
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Erjola Barbullushi: University of Shkodra '' Luigj Gurakuqi'' Albania
Senida Boshti: National Commercial Bank, Shkodra Branch Albania

EuroEconomica, 2015, issue 2(34), 29-38

Abstract: The euroisation issue in European Integration context, is a continuous process of discussions between different researchers and regulatory institutions. Nowadays, different aspects of collaboration and integration processes between countries in the region, are extended in all politics, economic and security dimensions. In this study, we are going to treat one of the aspects of this process integration for Albania: the possibility of substituting the Albanian Lek with Euro, beginning with the explanation of the concept of euroisation. Also we are going to identify the actual non-official replacement level of lek and how it is expected to be realized in the future. Albania like other developing countries is lack of a currency with which people can buy abroad and which can be used in short-run and long-run credit contracts. On the other hand, the exchange rate represents an important risk, especially for the business which realizes transactions in foreign currency. Here in we are focused on the measurement of the money replacement level in Albania through three main methods. For this purpose is used the regression analysis in order to test the hypothesis under evaluation in two directions: endogenous and exogenous potential factors affecting this replacement. Through the factor analysis identifying the pro and cons of the euroisation phenomenon, we will give the potential alternative in our county economy conditions. Finally, the replacement rate cannot be assessed without being related to the degree of money in circulation replacement and the degree of assets replacement and without being connected with the exchange rate between currencies.

Keywords: asset replacement; money replacement; OMA theory; exchange rate; Albania. (search for similar items in EconPapers)
Date: 2015
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