Algeria’s black market emphasises economic distress
Algeria’s black market for foreign currency emphasises the economic distress as the dinar is deemed “worthless”, according to AP News.
On the 16th February, AP News reported that national confidence in the dinar’s value has plummeted due to the Algerian governments incompetence in allowing the exchange rate to fully adjust.
Currency traders near central Algiers carry stacks of euros, dollars, and pounds around, looking to exchange currencies with any dinar doubters.
While the official exchange rate equated one euro to 145 Algerian dinar, on the same day, black market currency traders sold one euro for almost 241 dinars, on 5th February.
The Algerian government estimate that around $7 billion worth of foreign currency is traded on the black market.
READ: Algeria and US discuss money laundering
Citizens of the oil-rich nation have lost buying power, due to the government’s attempts to combat inflation and conserve state spending.
Concerned about the depreciation of his pension, 72-year-old retired teacher, Rabah Belamane told The Associated Press that “Inflation has destroyed the buying power of Algerians, who are falling into poverty.”
Although experts have warned against the two parallel existing exchange rates, highlighting risks of encouraged corruption and discouraged investment, Hicham Safar, head of a finance committee in parliament suggests that the growing difference in the exchange rates has resulted in fewer euros entering the country.
Mr Safar also claimed that “There’s no more overcharging on imports,” commending the improved regulation of imports through the Bank of Algeria and the minimised use of foreign currency.
Despite Algeria’s influx of new trade due to Russia’s invasion of the Ukraine, the country was not exempt from food crises or the swelling prices of basic groceries such as cooking oil, vegetables, and chicken.
AP
