Have you ever wondered how the currency market works in Algeria? How do people buy and sell foreign currencies in a country that has strict regulations and controls on exchange rates? And what are the main factors that influence the supply and demand of currencies in this market?

If you are interested in these questions, you might want to check out a recent paper by Dr. Brahim Gana and Dr. Nacer-Eddine Mouffok from the University of Bejaia, Algeria¹. They conducted a qualitative study based on a field survey of formal and informal operators in the municipality of Bejaia, one of the largest cities in Algeria.

The paper explores the specificities of the Algerian currency market and its main determinants. It shows that the formal market, which is regulated by the central bank and the commercial banks, is unable to meet the financing needs of economic agents, especially importers and travelers. This creates a gap between the official exchange rate and the market exchange rate, which is exploited by informal operators who offer more flexible and convenient services.

The paper also identifies some of the main factors that affect the supply and demand of currencies in the informal market, such as political instability, inflation, trade balance, remittances, tourism, smuggling, corruption, and speculation. The paper argues that these factors create volatility and uncertainty in the currency market, which can have negative impacts on the macroeconomic stability and development of Algeria.

The paper concludes by suggesting some policy recommendations to improve the efficiency and transparency of the currency market in Algeria, such as liberalizing the exchange rate regime, diversifying the sources of foreign exchange earnings, strengthening the supervision and regulation of informal operators, and enhancing the coordination between monetary and fiscal policies.

If you want to learn more about this topic, you can read the full paper here¹.

(1) Les Spécificités du Marché Algérien de la Devise et ses Principaux …. https://www.asjp.cerist.dz/en/downArticlepdf/196/6/1/115481.

(2) Algerian Scientific Journal Platform. https://www.asjp.cerist.dz/en.

(3) Algerian Scientific Journal Platform. https://www.asjp.cerist.dz/.