Clear Recovery Of The Dinar Against The Dollar And The Euro At Banks

There were strong indications of a clear recovery of the Algerian dinar against the euro and the dollar in official dealings with banks, which made the national currency achieve gains that it has not been able to achieve for years, which raises questions whether this recovery will have an impact on the informal currency market on the one hand and also on the value of the currency in the markets and capacity of the purchasing power on the other hand.
In this context, data on the official website of the Bank of Algeria for September 6 indicates that 1 dollar equals 140.2569 dinars for the purchase and 140.2719 for sale.
According to these data, the national currency achieved approximately 6 dinars as gains compared to the green banknote, given that the official exchange rate for it in the past months amounted to about 146 dollars per one dinar.
And the national currency began the new year with a major collapse against the dollar, as its exchange rate in banks at the end of last January reached the level of 140 dinars per one dollar, at a level that is the weakest ever in the history of the Algerian currency at the time, with a difference of only 9 dinars from its level included in the Finance Law of 2022, according to the expected closing level for the current year, while the closure in 2021 was set at the level of 135 dinars per dollar.
And if the situation continues until the end of the year, which is likely, as the closing of the fiscal year for the dinar will be less than what the government drew under the 2022 Finance Law, with the expected closure at the level of 149 dinars per dollar, something that has not happened for more than 10 years at the least, given that successive governments have adopted a policy of devaluing the dinar every year, to secure greater financial returns against the dollar.
As for the most important gains of the national currency, it was compared to the euro, as the Bank of Algeria data for this week indicates that it amounted to 139.5977 dinars per one euro for purchase, and 139.6547 for sale.
Given these data, the dinar achieved gains of no less than 16 dinars in official circulation compared to the euro, given that its level was at 156 dinars per one euro in the past few weeks, after it had reached 160 dinars compared to 1 euro at the end of last year and the beginning of the new year.
In this context, the expert and economic analyst, Nabil Djoumaa, believes that this improvement in the level of the national currency exchange with official banks is due to the recovery of four main indicators that are the basis for assessing the level of the Algerian dinar.
The latter explains in a telephone conversation with “Echorouk” that the first basis is the competitiveness of the Algerian economy compared to other economies, and the second is energy prices, which explains the higher value of the Algerian currency, while the third indicator relates to the balance of payments, and finally the growth of the national economy through the gross domestic product against the backdrop of the performance of the economy in general, stressing that “all these indicators have improved this year, and therefore the value of the dinar rose compared to foreign currencies.”
In response to a question regarding the possibility of the impact of this improvement in the currency on the daily life of citizens, in light of the rise in prices and the decline in purchasing power, Nabil Djoumaa stressed that “logic says yes, but the Algerian reality says the opposite.”
Djoumaa pointed out that the currency’s improvement so far is slight compared to the prices that rose three to four times, in light of the country’s dependence on imports on a large scale for various products.
Djoumaa added that previous governments, especially from 2006 to 2014, although the indicators for evaluating the dinar were in the green box almost all, but they adopted the policy of flotation and devaluation of the dinar, and accepted what was dictated by international monetary institutions, and this also caused a hike in prices and a deterioration of purchasing power.