The Algerian dinar, which has been at historic lows for several years, has strengthened in recent months at least against the euro, which has been at its lowest levels against the US dollar since its inception 20 years ago.
According to the rate table published by the Bank of Algeria on the Algiers interbank market, on Monday, August 29, the single European currency was worth 139.37 Algerian dinars.
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The euro was worth 140.30 Algerian dinars on August 25. The euro’s fall against the Algerian dinar follows its fall against the US dollar, which has now outperformed it for the first time in two decades.
The greenback traded at 140.25 Algerian dinars on Monday, down slightly from August 25 (140.95 DA).
For the European single currency, it recorded its lowest level against the Algerian dinar since May 2020, when the mark of 140 dinars to one euro was exceeded for the first time. His absolute record comes from January 2021 with 162.77 Algerian dinars.
The fall of the euro is not followed by a proportional adjustment of prices on the parallel market, where the European currency remains above 200 dinars.
This can be explained by the fact that it is the Eurozone countries, especially France, that attract the majority of Algerian travellers. In view of the weak tourist allowance (less than 100 euros per traveler and year), the latter are forced to purchase euros on the parallel market.
At the beginning of August, the President of the Republic, Abdelmadjid Tebboune, in a meeting with the national press, indicated that the capacities available to Algeria would allow him to recover the value of the dinar.
The situation is in fact doubly favorable for the Algerian economy, whose hydrocarbon revenues are increasing due to the increase in the price and value of the dollar compared to other currencies, since gas and oil exports are made in dollars.
However, this is unlikely to have a positive effect on inflation and the purchasing power of Algerians, since food imports in particular are also predominantly paid for in dollars. Hence the continuation of the upward trend in consumer prices despite the sharp fall in the euro.