In Algeria, the exchange rate on the black currency market is experiencing a period of upheaval, marked by a notable fall in the prices of the euro and the dollar compared to the dinar. This decline, which began at the beginning of December, plunges currency traders and economic players into great uncertainty.
Indeed, after a surge in September, reaching a historic peak with the euro at 262 dinars and the dollar at 248 dinars, the prices of foreign currencies experienced a rapid and unforeseen fall. To date, the euro is trading at around 247 dinars, a drop of 15 dinars in two weeks. The dollar for its part is trading at 235 dinars, losing 13 dinars in a few days.
This sudden fall surprised currency traders, who are struggling to clearly identify the causes. According to some, the massive sale of euros held by savers fearing losses could explain this phenomenon. However, the reasons for the collapse of foreign currencies are multiple.
The impact of government measures on the black market exchange rate
In recent weeks, the Algerian government has announced a series of measures likely to have a lasting impact on the currency market. Among these, the increase in the tourist allowance to 750 euros per adult, compared to 100 euros previously, should reduce travelers' dependence on the parallel market.
This reform, which will come into force in January 2025, could significantly reduce demand for currencies on the black market.
At the same time, a new regulation limits currency outflows to 7,500 euros per year, compared to 7,500 euros per trip previously. These measures aim to counter informal circuits and regulate the use of currencies, while reducing the attractiveness of the black market.
The black market responds to a chaotic phenomenon
The black currency market, by its informal nature, remains difficult to analyze. Price fluctuations are often influenced by factors that are not very transparent, such as the unforeseen needs of importers or the strategies of informal barons. In addition, the structure of demand, shared between small buyers (tourists, students, patients) and large informal players, makes forecasts uncertain.
According to some observers, if the new allocation mainly meets the needs of small buyers, a dramatic drop in prices could follow. On the other hand, if large buyers dominate demand, the parallel market could shift to other countries, such as Turkey, where the euro already trades at higher rates.
How long will this fall in currencies last?
The first weeks of January 2025 will be crucial to assess the impact of reforms on the currency market. Authorities will need to closely monitor the reactions of black market players and adjust their policies accordingly. If the government manages to stabilize official exchanges and reduce the informal sector, this could mark a historic turning point in currency management in Algeria.
This situation illustrates the challenges facing the Algerian economy in its fight against the informal sector, and the ongoing reforms could constitute an opportunity to rebalance the country's financial market.
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