Emerging Markets Rates and Currencies Handbook

Algeria (DZD - Algerian Dinar) Citi in Algeria Citi is the first foreign bank to be established in Algeria. Citi have had a significant involvement in Algeria for many years in areas such as correspondent banking, trade finance and corporate finance. A representative office was established in Algiers in 1991. Citi was the first foreign institution to apply for and obtain a commercial banking license in 1997. Market Overview The Algerian Dinar is managed floating currency allowing the Bank of Algeria to intervene regularly in the FX markets. The DZD is a basket currency which is not officially disclosed but is estimated to be roughly 65% USD 35% EUR. The Central Bank may intervene to adjust the local currency against the basket on the back of the economy fundamentals. Most trades are done for goods/services import, mainly by public sector and big multinationals. In August 2017, the CBK has issued a new regulation allowing local hedging via deliverable forwards. Swaps and options will be introduced at a later stage. The local forward market is live since January 2018. Convertibility DZD is partially convertible. It is commercially convertible for residents and must be related to a commercial transaction (Import of service/goods, dividends for production companies) and backed by documentation. Non-residents can have convertible DZD accounts, funded in FCY. No restrictions when selling FCY. Interest Rate Citi Algeria acts as primary dealer on the Government Bond Market and is also active on secondary market trading mainly short term maturity bills/bonds. Bond markets is liquid with weekly auctions and an outstanding of USD 12bln. The daily trading volume in the secondary market is around USD 15MM. Citi is also present in the Money Market on overnight and weekly placements. 63