Algeria Placed $65 Billion as Bonds in US Treasury

Algeria has placed 65 billion USD as bonds in the US treasury, or about 40 percent of the North African nation’s GDP in 2010, sources within the US Embassy in Algeria revealed to Echorouk.

Such an amount is likely to make the impact of the US debt crisis heavier on Algeria, given that the USD currency has dropped following the announcement of the US Federal Reserve Council that it will maintain the price of the interest rate at around 0 percent for the two upcoming years, amid an inflation varying between 3 and 3.5 percent since January 2010. 

Algeria exchange reserves reached 173.3 billion USD until the half of this year, of which 108 billion are placed in Euro as European bonds which still enjoy the excellent AAA rate, noting that the US debt crisis has had embarrassing impacts on Greece, Ireland Spain and Italy.

Yet the Algerian government is still inactive towards developments in the United States, although experts have urged reconverting the USD reserves into gold or Euros, as soon as possible, to avoid any further unsuitable repercussions of the downgrading of US debts rate.

However, the government is due to draw up the next year’s budget, taking into consideration the 33 percent budget deficit in 2011, amid the drop of oil prices from 120 to about 102 within a couple of days.

Elsewhere, the government has already announced an increase in public expending to $23 billion this year, or by 25 percent increase comparing to last year, in addition to exempting imports of staple foodstuffs, like sugar and food oil from customs duties. Such measures are likely to curb Algeria revenues and increase surplus of trade balance, due to the increase of import bill, which is expected to hit $50 billion.