This paper empirically reassesses Albania’s exchange rate strategy, focusing particularly on the macroeconomic implications of the lek’s unprecedented appreciation from 2022 to 2024. Utilizing a robust two-way fixed-effects panel regression approach for eight Western Balkan economies spanning 2009–2024, the study estimates the effects of Albania’s currency appreciation on key economic outcomes real GDP growth, consumer price inflation (CPI), external competitiveness, and tourism receipts. The main research question is whether Albania’s current flexible exchange rate provides better overall macroeconomic stability and growth or if a fixed exchange rate regime—such as a currency peg or euro adoption would offer greater advantages, especially given Albania’s ongoing negotiations to join the European Union. Results demonstrate that the lek’s appreciation had negligible effects on real GDP growth but significantly reduced CPI inflation by approximately 3.4 percentage points. Competitiveness effects, assessed through the real-effective-exchange-rate (REER), appeared initially mixed but indicated potential overvaluation concerns in 2024. Meanwhile, tourism receipts displayed no significant sensitivity to exchange rate changes once broader global recovery factors were controlled for. These findings support the use of a managed floating exchange rate regime, emphasizing proactive policies to address emerging competitiveness risks, structural reforms to diversify exports, and investment in non-price tourism competitiveness. Strategic preparations for eventual euro adoption are recommended, contingent upon structural convergence and economic maturity.