Government uses foreign exchange reserves to cope with oil crisis
الشروق أونلاين
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Photo: archive
First four months of the current year will have a larger impact than the loss on Algeria exchange reserves from hard currency, Economic expert, Abderrahman Mebtoul, told Echorouk.
“Decline will be larger by $ 8 billion that were announced by the Governor of Algeria Bank. Complementary financial law has become an inevitable matter.”
“Current price of oil is under $ 50, and the state’s inability to curb imports suddenly, as this will increase the foreign exchange reserves. Algeria has lost more than $ 8 billion in a matter of four months during the past year, and prices then were in the range of $ 90 per barrel. Currently, the price level has come down by almost half, foreign exchange reserves will decline more, far behind by $ 8 billion. This situation will make foreign exchange reserves from the past and will end in a matter of four years at the most.”
“Continuation of this trend, as is likely, would mean the adoption of a supplementary finance law by public authorities. I think that the debate in the pyramid of power has begun regarding the supplementary finance law because it has become inevitable in light of the current financial situation. It is possible to begin consultations on this law on March.”
“Current pace of public spending will end all the savings from the fund of exports in no more than two years, especially as the import bill will remain high, especially that 65% of them are relating to government’s imports of projects and investments that are belonging to the state. It is difficult to stop imports suddenly and curb them gradually because stopping them would lead to stopping the most of the workshops in the country.”
