What Is the Albanian Lek (ALL)?
The Albanian lek (ALL) is the national currency of the Republic of Albania. The plural of lek is lekë, with one Albanian lek consisting of 100 qindarka. Due to inflation, qindarka-denominated coins are no longer issued but still accepted as legal currency.
As of December 2020, US $1.00 is equal to approximately 101 ALL, or 1 ALL is about $0.01.
- The Albanian lek (ALL) is the official currency of Albania, which has been in use since 1926.
- Prior to the lek, the country used gold as currency or relied on foreign issue such as the Ottoman piastre or franc germinal.
- The currency has lost value over time against world currencies as the country has been subject to several iterations of regime change and infighting.
- Albania has applied for EU membership, and if approved will likely switch over to the commonly used euro as official currency.
Understanding the Albanian Lek
The Albanian lek (ALL) used in the Republic of Albania was first issued for circulation by the National Bank of Albania in 1926. The currency derives its name from Alexander the Great, as the shortened form of his name is Leka in Albanian. Before 1926, Albania did not have its own national currency and adhered instead to a strict gold standard or relied on foreign money in exchange. Before the First World War, the Ottoman Turkish piastre circulated widely in the region.
After World War I, the country saw a succession of the military occupations by various powers, who would impose their own currency as legal tender. The gold franc or franc germinal became the most widely used monetary unit during that time. Because Albania had no official money, people also used the currencies of bordering countries pegging the rates of exchange for gold.
History of the Albanian Lek
The first lekë minted were bronze coins introduced in denominations of 5 and 10 qindarka alongside nickel coins issued in 1/4, 1/2, and 1 lek denominations, and silver 1, 2, and 5 franga. The franga is now an obsolete unit of currency, equal at the time to 5 lekë. Franga coins were used from 1926 until 1939 and depicted Zog I, King of the Albanians.
During Albania's capitulation to Italy in WWII, the issue of a new series of coins under the direction of Benito Mussolini occurred. The coins have a portrait of Victor Emmanuel III, the then King of Italy, and circulated until 1941. After the liberation of Albania from Nazi occupation in 1947, the communist party took control of the country. The new authority removed older coins from circulation, issuing new coins displaying the socialist national crest. The new zinc coins have denominations of 1/2, 1, 2, and 5 lekë. This currency was pegged to the Soviet ruble and was in use until the currency reform of 1965.
During the Soviet occupation between 1946 and 1965, the lek was pegged to the Soviet ruble at 12.5 lekë to 1 ruble until 1961 and 1.25 lek to 1 ruble between 1961 and 1965 after the ruble was redenominated. After 1965, the revaluation of the ruble created inequalities in exchange, causing the issue of a second lek. The second series of lek exchanged with the first lek at a rate of 10 old lekë to one new lek.
The most common banknote denominations are presently 200, 500, 1,000, 2,000, and 5,000 lekë. The 2,000 lekë banknote came with the third issue of ALL in 1996.
Albanian Political & Economic History
The Republic of Albania holds a strategic position in the Balkan Peninsula due to its cliff-lined coastline on the Adriatic Sea. The area declared independence in 1912 from the Ottoman Empire and began existence as a principality. There was initially discord between the culturally and religiously separated groups resulting in episodic fighting between factions.
Between 1925 and 1928, the first Albanian Republic fell under an authoritarian regime that sought to restore stability to the region. The Italians, however, forced the regime to accept Italy's influence over trade and shipping, which ended the short life of the first republic and converted it into a monarchy. To tighten its hold on the area, Italy subsequently moved troops into the region, occupying the territory until 1943. Albania briefly fell under Nazi Germany's control during WWII during which time fighting devastated the country and its population.
As the Axis powers waned, the Soviets moved in, liberating the country. Albania became a communist state, the People's Republic of Albania. During Soviet rule, the area industrialized rapidly and its economy grew. At the same time, the nation ran up debt with its allies, the Soviet Union, China, and Yugoslavia.
With the fall of communist rule in the late 1980s into the 1990s, Albania formed its fourth republic in 1991. Corruption, however, saw much of the country's money wasted on government-supported Ponzi schemes and banking fraud. For instance, many citizens were coerced to sell their homes and take out loans to invest in these scams, which collapsed in 1996. Protests erupted across the nation, which turned violent and ousted the sitting government.
As of 2019, World Bank data shows the country has a 2.2% annual gross domestic product (GDP) growth with annual inflation at 0.4%.