Algiers: Algeria’s central bank has let the country’s currency depreciate to a historic low against the US dollar, a central bank source said yesterday, seeking to lower a soaring import bill after vital oil revenues dropped by half.
The dinar’s weakness risks fuelling inflation in the North African country, where the government fended off protests in 2011 for better living conditions by offering free loans to young people, social housing and public pay
increases.
The central bank, which keeps the dinar in a managed float against major currencies, hope the move will curb imports, which are expected to reach $57.3 billion in 2015, exceeding exports by their widest margin ever, a financial source told Reuters.
But ordinary Algerians in the country of 40 million people have already felt the impact of a gradual depreciation in the past few weeks, facing difficulties in buying some products as shelves in shops have offered fewer foreign products.
Annual inflation accelerated to 4.5 per cent in April from 4.1pc in March, official data shows.
“When the dinar falls, the prices of imported products go up and will not be affordable to everyone,” said Abdelkader Gasmi, head of a local consulting firm.
The dinar slumped to 105.84 to the dollar and 117.48 to the euro, the central bank source said.
The dinar was estimated at 79.6 to the dollar in 2014.
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