Cash money makes a splash in the market, surpassing 422 billion lek in January.

The amount of money circulating outside of banks in the country reached more than 422 billion lek, or about 4.2 billion euros, in January. Compared to the same month last year, uncontrolled “cash” money expanded by 34 billion lek. This is among the highest levels ever recorded.

“Money circulating outside the banking system is part of the informal economy, and along with it, there is also money from criminal activities taking place both inside and outside our country,” said Zef Preçi, an expert on the economy.

In relation to the total amount of money circulating in the Albanian economy, which is estimated at 1.79 trillion lek, informal money makes up nearly 23.6 percent of the total. To understand the high level of money outside banks, it is enough to mention that in European Union countries, this indicator does not exceed 9 percent.

“Partly due to the incompetence of the administration and partly by allowing the entry of money from criminal activities, we have today such a high level of money outside the banking system. Although the Fiscal Amnesty was not allowed to be passed as law, in practice, it has happened,” said the expert.

Economy experts assess that the large circulation of money outside of banks is the main cause of the devaluation of the euro and other currencies.

“I agree with international institutions that there may be some effect, but we can never claim that informal money can be fought by commercial banks.”

This “tradition” of cash payments paves the way for informality, making it harder to combat money laundering, negatively impacting the economy as the circulation of money remains uncontrolled. For these reasons, the Ministry of Finance and the General Directorate of Taxes have begun working to limit cash payments as a solution to reduce the circulation of money outside the banks in the country. /A2 CNN