Reasons Behind the Euro Price Increase on the Black Market

The euro price has risen significantly on the black market for hard currency in Algiers Port Said Square and other parallel points in other wilayas.

Indeed, the price of 1 euro reached DZD 245 for purchase and DZD 235 for sale during the last hours.

In contrast, the US dollar price in the same market reached DZD 225 for sale and DZD 235 for purchase. At the same time, Serafs expect prices to continue rising until the end of the year, attributing it to the growing demand for hard currency and the partial decline in supply at the beginning of September.

This coincides with the Bank of Algeria’s preparation to adopt official exchange offices, under the new monetary and banking law, after completing all regulatory procedures accompanying the process.

In this context, financial expert Abou Bakr Salami told Echorouk that “the price of hard currency in the parallel market rises and falls based on the level of supply and demand and the extent to which the market is supplied each time with new quantities of foreign currencies”, stressing that “the increase recorded during the last forty-eight hours is due to four factors”.

In this regard, Salami recalled that the supply has partially decreased due to the Algerian diaspora leaving their homeland at the end of the summer vacation and returning to countries of residence, where they pursue their studies and work. During the last three months, these people were pumping significant amounts of hard currency which they brought from abroad into the black market.

“One of the reasons for the rise of hard currency’s price in the parallel market during this period is the high demand for vehicles less than 3 years old imported from abroad in light of the exhaustion of the last share of cars officially imported by vehicle dealers, knowing that those concerned acquire hard currency from outside banks”, expert Salami added.

The expert explained that this period coincides with university and study registrations in European countries, therefore, their need to provide certain amounts, and their rush to black points to exchange currency to obtain euros and dollars.

“The fourth reason for the rise in the price of the euro on the black market is the Umrah season that coincides with the occasion of the birth of the Prophet celebrations, and the travel of a significant number of Algerians to perform the rituals in the holy places, and thus, their demand for the euro and the dollar increases, expecting the high demand to continue until the end of this year”.

Salami believes that the solution to controlling exchange rates is to speed up the opening of approved exchange offices according to a regulated profit margin, which was included in the monetary and banking law issued more than a year ago and implementing texts that are still being issued gradually.

In response to a parliamentary question, the Minister of Finance, Laaziz Fayed, had previously confirmed that the draft regulation of the Bank of Algeria relating to exchange offices had been studied and approved by the Monetary and Banking Council during its regular session held on September 21, 2023, as the adoption of this project in its first phase aims to create the necessary conditions to encourage the deployment of a national network of exchange offices to facilitate foreign currency exchange operations on a large scale.