The Liquid Banking System / BoA lent to banks with ALL 39.1 billion in August

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The banking system needed less liquidity and the Central Bank lending to commercial banks decreased by ALL 2.3 billion in August, having increased for several months, following the onset of the COVID-19 crisis.

In August, the Bank of Albania lent to commercial banks with ALL 39.1 billion, or about ALL 2.3 billion less than in July.

According to the information from the Bank of Albania, the loan for commercial banks is provided through reverse repurchase agreements (REPO).

In the conditions of the COVID-19 pandemic situation, in March, the Bank of Albania changed the form of REPO agreements, providing banks with unlimited access to liquidity. After May, lending to banks through REPOs resumed growth, reaching the highest level of ALL 41 billion in July.

According to bankers, a factor with a significant impact on the liquidity situation of banks has been the postponement of loan installments, which amounted to ALL 27 billion.

This additional liquidity, which gave breath to businesses and households, in turn, created a gap in banks, which was offset through the REPO portfolio.

The data show that the liquidity pressure caused by COVID-19 on the financial system is constantly easing.

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