There are two types of so-called tourist or support leks. A rate of 12.50 leks per US$1 applies to the official exchange of Western currencies by nonresidents and to support payments received by residents from Western sources. A rate of 7.55 leks per US$1 applies to the exchange by Communist country residents of their national currencies and to support and other noncommercial payments transferred by them from Albania to Communist states. A third variety of official exchange rates consists of the rates used to balance clearing accounts under special trade and payments agreements with Communist countries. An illegal black market rate of about 60 leks per US$1 from early 1968 through early 1969 was reported by reliable sources.

All currency matters are administered by the National Bank jointly with the ministries of finance and trade. Albania is not a member of the International Bank for Reconstruction and Development or of the International Monetary Fund.

Adequate information is not available on the nature of the relationship between the State Bank and the Ministry of Finance or on the bank's financial operations beyond some outdated statistics on credits and savings deposits. As the principal financial institution, the State Bank carries out the financial policies of the Party and government. It issues currency, provides credit to all economic sectors, accepts savings deposits, and serves as the country's treasury. In addition to these functions, the State Bank helps prepare the financial plans for the economy, is called upon to assist enterprises in completing their planned assignments, and is responsible for controlling all economic activities through the use of its financial levers.

In mid-1969 the State Bank was severely criticized for poor performance, particularly its failure to exercise adequate control over unauthorized use of funds and waste of materials by the enterprises it helped to finance. The bank's failure was largely precipitated by uncertainties created through a decentralization of economic authority, decreed by the Party, and a dilution of the bank's control function.

A specialized system of state savings and securities banks was established within the Ministry of Finance in November 1968, for the purpose of mobilizing the population's savings for investment through loans to the state and the sale of its securities. The text of the law that created this institution contained no provision concerning the relation of these new savings and securities banks to the State Bank. Further information on the new banks was not available in mid-1970.

The only available information on the State Bank's financial operations consists of partial data on loans to agriculture and for housing and on the number and amount of savings deposits. The total volume of farm credits, exclusive of credits to state farms for which statistics have not been published, increased from 95 million leks in 1960 to 252 million leks in 1964, including long-term loans of 38 million and 44 million leks, respectively. By 1967 long-term loans had increased to 56 million leks. The statistics do not indicate whether the published data refer to the annual volume of loans granted or to the total amount of outstanding loans. A small fraction of the loans after 1960 was granted to individual peasants for the purchase of livestock.

Loans for housing construction and repair declined drastically from 17 million leks in 1960 to only 7 million leks in 1964. The distribution of the loans between urban and rural areas fluctuated widely, but urban loans predominated by a large margin and constituted from 69 to 93 percent of the total. The number of savings accounts increased from 235,400 in 1960 to 445,000 in 1968, and the volume of deposits rose from 119 million to 247 million leks. Interest paid on these amounts totaled 3.6 million and 4.8 million leks in the respective years, which implies a reduction of the interest rate from about 3.0 to 2.5 percent.

FOREIGN ECONOMIC RELATIONS

Foreign Aid

The country's foreign economic relations have been conditioned by its leadership's economic goals and political persuasion. As a poor, undeveloped country intent on modernizing and expanding its economy at a rapid pace, Albania has had to rely heavily on foreign economic and technical assistance during the post-World War II period. The leadership's extreme Marxist orientation and hostility toward the Western nations have precluded a recourse to non-Communist sources of aid and have made the country entirely dependent upon contributions by other Communist states. But even within the Communist sphere political disagreements have had a disruptive effect on aid arrangements ([see ch. 6], Government Structure and Political System).