An analytical study of the impact of the official exchange rate on the purchasing power of the currency- The case of Algeria for the period (1970-2019)

Abstract

This study aimed to shed light on the impact of changes in the official exchange rate on the purchasing power of the Algerian dinar, as expressed by the consumer price index during the period (1970-2019). It was concluded that the difficulty of achieving economic diversification and the absolute dependence of the Algerian dinar, and consequently high inflation rates and a deterioration in the purchasing power of the local currency. Accordingly, it has become necessary to make structural change that push for greater diversification of production, which would raise the value of exports, diversify financing sources and face the risks of possible external shocks.