Algeria’s Tebboune in denial as currency continues its free fall

Algeria’s President Tebboune has sought to play down the dire financial and monetary conditions in the country as the currency plunged to a historic low, trading at 290 dinars per euro on the informal market.

This collapse signals a deeper structural crisis in an economy crippled by hydrocarbon dependency, corruption, and chronic mismanagement.

The dinar’s freefall is accelerating inflation and destroying purchasing power, with prices of basic goods soaring and pushing households to the brink. Analysts warn of a looming hyperinflationary spiral, fueled by a widening gap between official and parallel exchange rates and a state unable to act decisively.

President Abdelmadjid Tebboune has brushed aside concerns, calling the crisis “temporary” and insisting as usual that Algeria has achieved “major progress in record time.”

During a recent visit to Constantine, he promised a “new and genuine launch” for the economy, anchored by mega-projects like the Gara Djebilet iron complex and Bled El Hadba phosphate venture, which he claims will secure “permanent safety” for Algeria’s financial future.

Critics argue that Tebboune is in denial. These projects remain years away from completion and cannot address the immediate collapse of purchasing power or the structural fragility of Algeria’s economy.

Meanwhile, the prices of oil have dropped to 60 dollars per barrel, auguring ill for the country’s finances.

Economists and analysts dismiss Tebboune’s narrative as disconnected from reality. Foreign reserves have fallen from $194 billion in 2014 to around $68 billion today. Myopic to this reality, the government maintains lavish spending on the army and subsidies to buy social peace at the expense of financial balances.

Algeria’s economic model is a textbook case of vulnerability: a rentier state with endemic corruption, anemic diversification, and growing diplomatic isolation. The dinar’s collapse is a symptom of systemic failure and an expected outcome of decades of reliance on hydrocarbons, without reforms, fiscal discipline, transparency, and genuine diversification.

The fall of the dinar is the first omen of serious complications that may sap what remains of Algeria’s state-dominated economy leaving the state on the brink.