Algeria’s Benefits Of Foreign Exchange Reserves

In a table published on the official website of the Bank of Algeria, here on Saturday, the dollar’s exchange rate against the euro was equal to a slight difference in favour of the US currency, equivalent to dzd 0.64.

The US dollar’s exchange rate against the dinar reached dzd 140.9399 for purchase and dzd 140.9579 for sale, while the euro’s exchange rate reached dzd 140.2775 for the purchase and dzd 140.3065 for sale.

The bulletin of the major currency rate pertains to the inter-bank exchange market in Algeria, through which the dollar exchange rate outperforms the euro, as experts believe that this rise in the price of the dollar against the European currency will contribute to an increase in the revenues of the Algerian foreign exchange reserves, which represent the hydrocarbons that are priced in dollars by 96% of its resources.

Financial expert Mohamed Hamdouche said in an interview with Echorouk that the rise in the dollar exchange rate against the euro could carry some good omens for the national economy, especially in terms of Algeria’s foreign currency reserves, most of which are priced in dollars, and feeding the Monetary Reserve Fund is usually from sales of hydrocarbons by 96%.

The spokesman expected that the value of reserves in dollars would rise by 20%, a positive factor that would revive Algeria’s revenues.

As for economic dealers, Hamdouche confirms that whoever buys or imports from abroad in euros, the value of his holdings will be the same as before, despite the low price of the euro, because the purchase will be made in the same currency, “as for importers in dollars, the prices of imported goods from America or even China and Asian countries to Algeria in dollars will notice an increase of nearly 20%”.

The expert explains that this rise or fall will continue until the European Central Bank decides to raise interest levels, and the difference between the euro and the dollar will fluctuate between the decisions of the Central Bank and the European Bank and interest rates there, knowing that the Europeans are forced to raise the interest rate to restore the value of the euro, without neglecting the importance of investment, and the opportunities to attract it, as the Central Bank is required to balance the high inflation rate, which reached 6% in Germany, for example, and the attractiveness of the investment.

Observers are optimistic about the dinar’s relative recovery against the euro, and they believe that this slight recovery will at least allow protecting dealers from additional expenses incurred during the past years, as a result of the high import bill due to the record decline in the price of the Algerian dinar against the European currency.

In a related context, the Governor of the Bank of Algeria is expected to participate in the parliament’s opening session on September 4, to assert the need to discuss several files, including the value of the dinar, monetary indicators, the opening of exchange offices for currency conversion, the inauguration of branches of Algerian banks abroad, and several important financial and monetary issues as well.