The Bank of Algeria announced a sharp decline in its foreign reserves, which fell to $39.6 billion at the
end of June 2025, compared to $51.4 billion six months earlier – their lowest level since 2018.
The contraction in Algeria’s foreign exchange reserves, from $51.4 billion to $39.6 billion is explained by the decline in hydrocarbon export revenues and the increase in imports, particularly food imports, exacerbated by the drought, the depreciation of the dinar, and the surge in wheat and powdered milk prices.
In its semi-annual bulletin, the Central Bank warns of the “structural fragility” of the Algerian economic model and calls for rapid diversification, the revival of non-hydrocarbon exports, and a
reduction in unproductive spending.
Current reserves are estimated to cover barely 13 months of imports.
The dinar continues to depreciate, with an average rate of 149.8 dinars to the dollar in the first half of the year.
Governor Salah Eddine Taleb has not ruled out an adjustment to the official exchange rate if this trend persists, while ruling out recourse to the IMF for the time being.
The markets remain cautious despite a recent issuance of 150 billion dinars in Treasury bonds. Several economists have criticised the authorities’ inaction and the lack of a clear industrial strategy.
While oil prices fluctuate between $72 and $78, the government hopes to offset the drop in revenues through the Reggane Nord gas project and an export agreement with Italy.
But experts warn that without genuine reform, Algeria risks a new adjustment crisis before 2030.
MK/te/Sf/fss/as/APA