Bank of Algeria: “Transfers To “Hard Currency” Accounts Via “Swift” Messages”

The Bank of Algeria issued a new instruction that allows intermediary banks to carry out hard currency transfers between them starting from February 14th, as a special measure to provide “Hard currency” at the level of banks, and the latter can borrow among themselves through hard currency accordingly, by adopting the “Swift” message format.

This “quick message”, and the new procedure, according to observers, aims to provide hard currency at the level of banks, to be accessible to their customers, especially when importing primary materials in the first place.

Instruction No. 01 issued on January 31, 2022, and signed by the Director General of External Financial Relations of the Bank of Algeria, Amine Boulesnan, aims to modify the pattern of interbank payments on hard currency accounts, which are usually carried out at the level of the clearing house – compensation – at the Bank’s website and this type of operation is carried out in a decentralized manner.

The new instruction stresses that accredited intermediary banks are obliged to transfer payment orders to the Bank of Algeria via “SWIFT” messages under the form of “MT202”, whereby the bank that obtains the authorization can request payment from its account denominated in hard currency, specified for the beneficiary bank.

According to the same instruction, of which “Echorouk” received a copy, payments are carried out on a daily basis between banks in a continuous manner, every time an appeal is sent to banks to transfer a “Swift” payment request through the bank and through hard currency, and the Bank of Algeria takes responsibility for the copying process for the debtor. In order to credit the amounts to the hard currency accounts of the customers of the banks concerned, in conformity with the executed payment requests, and for their part, the accredited intermediary banks shall continue to exchange documents proving the payments made between them.

As a matter of fact, the Bank of Algeria (BA) has sent to banks a new note relating to the opening of foreign exchange cash accounts, published on its website.
It is note N 02/2022, dated 26 January 2022, and signed by the Director General of Foreign Exchange, Louai Zidi.

It intervenes in application of article 4 of the regulation N 04-2020 of 15 March 2020, relating to the interbank foreign exchange market, treasury operations and foreign exchange risk hedging instruments.

To this end, the note informs banks “that they can open foreign currency treasury accounts on the books of the Bank of Algeria”.

“These accounts will be dedicated to the processing of foreign currency cash transactions concluded between banks on their behalf or on behalf of their customers, and are subject to the same rules of operation and authorization as those governing the dinar cash account,” the document states.

“These accounts operate on a credit basis and must not under any circumstances show a debit position,” the same source explains.

The Bank of Algeria has also noted that “the foreign exchange own funds account will continue to be dedicated to all the bank’s own operations”, specifying that “the banks will transmit to the Bank of Algeria (Directorate General of External Financial Relations – DGRFE), the list of persons authorized to move it”.

The operating mechanisms of foreign exchange treasury accounts will be detailed in a note from the DGRFE, the note said.

According to the same sources, the approved intermediary banks can use the interests of the Bank of Algeria in the event of any difficulty in implementing the provisions of the current instruction, which is expected to enter into service and implementation starting from February 14, bearing in mind that the procedures included in Instruction No. 65 issued on January 14, 988 is canceled, based on the new directive.

And the Bank of Algeria had previously sent a new memorandum to the banks, which was published on its website, related to the opening of cash accounts in hard currency. Banks are for their own account or for the account of their customers are subject to the same rules of management and qualification as those that operate the treasury in dinars.