4.3 billion euros circulate in the hands of Albanians - BoA: Money outside banks, with an increase of 10.2% in March
There are around 4.3 billion euros in circulation outside banks in Albania. The latest data from the Bank of Albania shows that physical money found outside the banking system has continued to grow at a rapid pace in the first quarter of 2025.
Compared to March of last year, where the money circulating outside banks was almost 3.9 billion euros, we now have an increase of 397 million euros or 10.2% of the money circulating in the hands of Albanians. Meanwhile, we recall that at the end of 2024, the money outside depository corporations was 4.2 billion euros from 3.9 billion in 2023, evidence of the rapid upward trend.
These figures indicate a greater presence of physical money in the economy, which could come for a number of reasons that include the culture of Albanians to make payments in cash, low interest rates on deposits that discourage individuals from keeping savings in banks, the high level of the informal economy, money from illegal sources, and others.
In order to reduce the use of cash in the economy, the Medium-Term Revenue Strategy envisaged that a limit on cash payments between individuals would be set by 2025, that cash payments between businesses would be further reduced from the current 150,000 lek, or that risk rules would be created, which would identify taxpayers who fragmented invoices in order not to exceed the limit set by law.
Meanwhile, it is expected that commissions for the use of POS terminals between second-tier banks and taxpayers will also be reduced.
Also, to further encourage electronic payments, the American company Mastercard had previously announced that starting from May 1, 2025, it would distribute 4,750 free POS terminals to Albanian merchants. This program would help many businesses that have not yet installed a POS terminal, due to the high cost associated with the latter, but at the same time it would offer one more opportunity for citizens to make card payments.
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