Algeria’s Foreign Exchange Reserves Stand At 109 billion Dollars Only

The effects of the acute crisis due to lower hydrocarbon prices on the world market continue to affect Algeria’s foreign exchange reserves, which stood at only $ 109.2 billion at the end of last February.

It is the Governor of the Bank of Algeria, Mohamed Loukal, who declared, on the sidelines of the answers to the questions raised by the senators, following his presentation of the report on economic and monetary developments of the country during 2015 and 2016 and until today, during a plenary session of the Council of the Nation or upper house of Parliament in Algiers.
As a result of this woeful financial downturn, the country’s foreign exchange reserves declined by $ 5 billion dollars in two months, he stated.
The Governor of the Bank of Algeria told the Senators who have questioned him about the current economic situation that “the crisis was more violent and harder than the crises the country witnessed before, or even more than you can imagine”.
According to him, “the ensuing deleterious effects were dramatic for the national economy”, as he put it.
However, he made it clear that “for history” the “rational” decisions taken a few years ago by the President of the Republic Mr Abdelaziz Bouteflika, including among others, the establishment of a fund to regulate revenues and the reimbursement by anticipation of the country’s external debt before the outbreak of the international financial crisis of 2008, have given the policy-makers considerable room for maneuver in economic policy management, Mr Loukal underlined.
“This set of salutary measures has enabled us to face up to the current crisis and to respond in a meaningful way to Algeria’s demands at the international level, he added.
Referring to the informal market, the Governor of the Bank of Algeria acknowledged his institution’s inability to cope with this growing phenomenon in our economy. “No party will be able to cope with this adverse phenomenon,” he said.
According to him, the measures that could contain this sprawling informal market should be taken in a “comprehensive” way in coordination with several ministries “namely: trade, finance, interior, agriculture and others.
On the same subject, Mr Loukal removed the possibility of changing the national currency notes, citing the example of India “which is still struggling in the crisis following the change of a single banknote”.
With regard to the purported opening of exchange offices in Algeria, the Governor reiterated his opposition to the move.
Mr Loukal said that if “we open the exchange offices, our own reserves will disappear in a few days.” He said there must be a “significant flow of tourists,” and “a common convertibility of the dinar.” Things that are unavailable for the moment on the national market.
Referring to the value of the dinar, the Governor of the Bank of Algeria pointed out that “since April 2016, the Dinar has seen stability or even an improvement in the exchange rate compared with the Euro, which has suffered a considerable drop versus the Dollar.
A financial situation that is “very favorable” to the foreign trade of Algeria, which exports in Dollars and imports 70% of the goods in Euros, he underscored.
Moreover, Mr Mohamed Loukal denied any administered management of the exchange rate of the Dinar, specifying that the latter is subject to the system of floating currencies.