The Algerian dinar has lost its stability which the currency had witnessed for two months. The dinar declined again against the main currencies, especially the US dollar and the European euro.
The exchange rate of the Algerian dinar against the US dollar reached 133 dinars for one dollar. This is the second largest decline in the currency’s history, after a series of declines in the beginning of March.
The Algerian dinar declined against the euro and reached 163 dinars for one euro. This is the largest decline of the dinar against the European currency.
According to the Central Bank of Algeria, the exchange rate of the Algerian dinar reached 132 dinars against the dollar and 161 dinars against the euro in February.
The average exchange rate of the Algerian dinar, according to the general budget laws for the years 2020 and 2019 reached 123 dinars for one dollar and 118 dinars for one euro respectively.
The price of the European currency, recorded in the Central Bank of Algeria, on December 15, 2020, was an unprecedented rise against the dinar, reaching 160.41 dinars per euro for purchase.
The pound sterling also rose against the dinar, and reached 175 dinars. As for the dollar, it settled at 132.22 dinars.
The Algerian currency had lost more than 4 dinars to the dollar, in early April 2020 with the beginning of the pandemic. The exchange rate reached 127.02 dinars to the dollar, after it was at 123 dinars. As well as, the euro jumped from 135 dinars during March 2020 to 137 dinars in April 2020.
The decline of the dinar against foreign currencies is due to the central bank’s adoption of a policy of floating the dinar, when necessary.
The dinar has already lost a large part of its value during the past year, to cope with the consequences of declining oil revenues and curb the import bill.
At the beginning of the oil crisis, in mid-2014, the exchange rate of the Algerian local currency was at 83 dinars for one dollar.
Currently, the value of the local currency exchange in the parallel market is 178 dinars per dollar, and 210 dinars per euro.
The decline of the Algerian dinar coincides with the continuing liquidity crisis that has plagued the financial institutions for nearly a year and threatened the wages and pensions of Algerians.
The crisis precipitated the dismissal of the Minister of Post Ibrahim Boumzar from his post, the day before yesterday, Tuesday.
Post centers and banks in Algeria have been suffering for months from a cash liquidity crisis. The government refers the problem to the Algerians’ withdrawing large sums from their accounts and saving them at home.
Other explanations to the crisis refer it to the weakness of commercial operations due to the pandemic.