The Algerian dinar has experienced a historic increase in official banking transactions, as the euro and dollar have stabilized around 150 Da. An increase, is considered as an unusual increase in the value of the Algerian national currency for more than a decade, the dinar has increased by 12.5% in recent days compared to this same period last year.
The academic predicts a continuous increase in the value of the dinar for the rest of the current year and even next year due to the geopolitical developments.
The Algerian dinar has been the monetary unit of the Republic of Algeria since April 1st, 1964, when it replaced the “new French franc” by the “law 64-111” of April 10th -1964.
Between the 60s and 80s, the Algerian dinar was considerably stronger than the Swiss franc, the French Franc, and the US dollar.We only know whether a currency is strong or weak when we compare it with other currencies.
In 1969 the Algerian dinar reached its highest value, many Swiss travelers to Algeria, and Algerians to Switzerland said that they exchanged around 1,250 Swiss francs at Geneva or Zurich airport for 1,000 DA.
Algerian currency has two forms:
- Coins (metallic money)and banknotes (paper).
The following two tables show the currency in circulation:
Coins in circulation
There are ten coins in circulation, alongside different commemorative reverse series (1/2 DA,
1/4 DA,1DA,2DA,5DA,10DA,20DA,50DA,100DA,200DA), as well as pre-1992 coins. There are 1DA, 5DA, and 10 DA coins from the 1970s and 1980s. Cents, on the other hand, are becoming increasingly rare. Their usefulness is relative, given the high inflation of the 1990s.
- Banknotes in circulation
Banknotes currently in circulation in Algeria come in 10 denominations: 100 dinars (1992), 200 dinars (1992), 500 dinars (1992), 500 dinars (1998), 500 dinars (2018), 1000 dinars (1992), 1000 dinars (1998), 1000 dinars (2018),
2000 dinars (2011), 2000 dinars (2020). In 2014, 100-dinar banknotes (1981 and 1982) and 200-dinar banknotes (1983) were circulating at the same time as the 100 dinars and 200 dinars (1992), which lost their legal tender status on January 1st 2015, they nevertheless retain their legal tender status until December 31, 2024.
The dinar is widely believed to be an Arabic currency, based on the sound it makes when pronounced and its widespread use in Arab states. However, it is actually a Roman currency, denarus, meaning ten, which was in use in Maghreb (modern-day Morocco) and across the Roman empire at the time of the First Punic War,struck around the year 260. It was this denarus which later gave rise to the dinar, overlapping another story: the conquest of Maghreb in the year 677 by the ruler Abu Muhajir Dinar of the Byzantine Empire. The 10th century saw the adoption of the dinar in Andalusia (modern-day Spain), Mesopotamia (modern-day Mesopotamia), and Syria (modern-day Egypt).
The Algerian dinars are composed of signs on coins and banknotes in terms of nature.
Now if we look to the design of the money we will see different elements:
- Order and security figures
- Name of bank (country)
- Dinars value in figures;
- Dinars value in words
- Date of entry into circulation
- Name of Bank Commissioner
- Signature of the Commissioner of the Bank
- Name of Treasurer General
- Signature of Treasurer General
Characters put in coins and banknotes are in general historical personalities, scientists and warriors or fighters like Massinissa, Amir Abdelkader, knights; the present is marked by teaching and knowledge, cheikh and students. As for the development of the country is taken by the social component, men and women.
Animals were put in coins and banknotes Several animals had anchored yet some of them are not from the Algerian geographical area: dromedary, elephant, falcon, bird, lion, gazelle, horse.
A former Bank official in Algeria says that because there aren’t any pictures of some important moments in the country’s history, we’ve used animals, which is a common practice in many countries. Basically, the fact that there are animals on the coins and notes of the Dinar is a symbol of country’s animal wealth.
The recent financial status of the Algerian dinars
The Bank of Algeria’s official exchange rates show that the euro has indeed fallen against the Algerian dinar. On 20-07-2023, according to the Bank of Algeria’s exchange rate table, one euro is worth 150.4969 dinars on sale (at the same date).
For the dollar, the Bank’s official exchange rate quotes 134.3722 dinars on sale. Again, this represents a slight fall in the exchange rates.
According to “Liberté” the famous Algerian newspaper, it is above all manufacturing companies that are bearing the brunt of the slide in the national currency against the euro and the dollar. These operators depend on foreign markets to maintain their production. They import raw materials from abroad and pay their suppliers in foreign currency.
The foreign exchange losses incurred by these companies will be passed on to the sales price of finished products. The effects of this depreciation on households are already beginning to be experienced with inflation affecting several products and likely to spread to a large proportion of goods that are not subsidized.
Pragmatism first and foremost, then monetary stability to avoid companies having to take expensive precautions to prevent exchange-rate risks, and to enable them to use their resources in the best possible way, which means to improve productivity and creativity, and therefore competitiveness. This is a key factor in trade and it moderates price effects on both imports and exports.
Indeed, when price elasticity is low, volumes traded remain constant and the volume effect on both imports and exports is less pronounced.
Having a strong or weak currency – that is, above or below its estimate has economic advantages and disadvantages for the countries concerned. The situation is experienced or desired differently. And this depends on whether you’re an exporting company, an indebted state or a tourist abroad, an industrialized country, or a developing country.
The advantages of a strong currency
The appreciation of a currency has a positive price effect on imports: the relative price of imports falls. The appreciation of a currency can has as much impact on interest rates as the interest rates set by the central bank, as a result of the interplay of supply and demand.
The disadvantages of a strong currency
Losing market share: The price impact also has an impact on exports. A country with a strong currency is able to sell its products at a higher price on both export and domestic markets than one with a weak currency.
Also, The volume effect which is the result of an adjustment to both domestic and international demand.
to continue over the coming years, as long as no far-reaching reforms are carried out on a whole range of public policies relating to the management of foreign trade, the State budget, the subsidy system, and public enterprises.
Besides the primary functions of the Algerian dinars as a store of value, a medium of exchange and a means of payment, money plays an important role in the Algerian dinar’s identity and cultural identity. It symbolizes identity and ownership (the flag); it reflects education and knowledge; it evokes science and progress; and finally, it serves as a historical reminder of the highlights of Algerian history, such as the ship representing the Algerian naval power of the time.
Written by Hadjer Terchi – freelance blogger | supply chain specialist