A Growing Black Market for Foreign Currencies Signals the Economic Woes Plaguing Algeria

The state, reluctant to allow the exchange rate to adjust fully, has proven incapable of limiting demand among the population as confidence in the dinar remains low. The widening parallel exchange rate underscores how every day Algerians have lost buying power as the government has juggled competing priorities, trying to combat inflation and maintain state spending, subsidies, and price controls that keep people afloat. In the oil-rich North African nation, business owners are rumored to be dumping their assets and scrounging up euros on the black market so their wealth isn’t stuck. Middle-class people also rely on euros and dollars to buy things in short supply like medicine, vehicle parts, or certain foods. Last week, the official exchange rate allowed one euro to be sold for 145 Algerian dinar, while on the same day, currency traders were selling one euro for nearly 241 dinars on the black market — 66% higher than the official exchange rate.

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