he Central Bank (BDL) has required banks and financial institutions to accept the repayment of retail foreign currency loans in lira at the official exchange rate of LL1,507.5. The move is part of BDL’s efforts to ensure monetary stability and protect vulnerable borrowers from the fallout of the severe economic crisis. Banks are reluctantly applying this circular while corporate borrowers have objected to their exclusion from this decision. Businesses have to settle their debt in the currency of the loan contract. This repayment scheme remains a temporary measure and is not likely to be sustainable as banks are incurring losses resulting from the gap between the official exchange rate and the exchange rate of BDL’s foreign
