Voluntary pension assets, 100% in lek - AFSA: Even investment funds have only 10% of their holdings in foreign currency
Most of the investment fund assets are in lek, while those in euro are declining.
The latest data from the Financial Supervisory Authority shows that in the past year, the value of the net assets of funds denominated solely in foreign currency has increased compared to the end of 2023, due to the increase in the activity of these funds and the entry into the market of a new investment fund that operates in the euro currency during this period.
However, the specific weight that these funds occupy towards the total net assets of the investment fund market has suffered a slight decline to 9.74% at the end of 2024.
The net assets of investment funds, which carry out their activities in foreign currency, are about 55 million Euros (5.394 billion Lekë) and account for about 9.74% of the total net assets of the market. Also, the liabilities of funds held in foreign currency, which represent liabilities to the management company for the management fee, to the depository bank and liabilities for payments to the unitholder, account for about 19% of the market's liabilities. Meanwhile, the net assets of other investment funds, whose assets and liabilities are held in the local currency Lekë, are about 50 billion Lekë and account for about 90.26% of the total net assets of the market.
In total, the market's net asset value increased by 22% during 2024, while more individuals showed interest in investing in these funds. Of the 18 investment funds currently operating in Albania, 13 open-end funds with public offerings have carried out activities in this market, 7 of which operate in foreign currencies, mainly in euros. The other investment funds carry out their activities in the local currency, lek.
As for voluntary pension funds, they conduct their activities entirely in lek. Citizens make voluntary pension payments only in lek and not in euros.
Official statistics show that the private pension market has total net assets of around 12 billion lek, marking an increase of 16.8%. As in the case of investment funds, these assets are invested almost entirely in treasury bills and bonds of the Albanian government.
Since 2017, the Ministry of Finance, the Financial Supervisory Authority and the Bank of Albania have taken several actions to reduce the use of foreign currencies in the economy according to the sectors they supervise or operate in.
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