Investment Fund
Taking as the hole, the Algerian banking system is structurally borrower. The offer on the market does not cover the entire demands. The shortfall of gap in the market is fully satisfied by United Bank of Algeria.
The award of credit will be the main instrument of power in the banking system in money of United Bank. Announcement of the tender:
Before each auction of credits by tender, the Bank of Algeria calls on banks and financial institutions, either by fax or telex, to tender to the proposed award.
The information they focus on:
- The interest rate target
- The types of adverse eligible
- The value date of the transaction,
- The date of the transaction
- The deadline for submission of tenders.
MONEY MARKET OUTLOOK
The growth restricted to the money market requires the introduction of new tools for use on the market in the context of indirect regulation.
The reform of existing mechanisms for refinancing and their replacement by market instruments complete the package of reforms known as the monetary and financial system through the transition to a market economy.
In the new context, the money market will be the true transmission belt of policies and actions of the United Bank of Algeria for the conduct of monetary policy.
Besides the interbank market, a market for negotiable debt securities will be set up and form new money market in the wider sense.
The market tradable debt appears as a bridge between capital markets in the short and long term where a variety of short-and medium terms are offered to agents to lending, such as Treasury bills, notes Cash and certificates of deposits.
The surplus balance of payments in the first half of 2008 remains at approximately 20 million The stock of official foreign reserves rose, and, 133 billion U.S. dollars, equivalent to approximately 4 years of imports at end June 2008. This has enabled Algeria to significantly enhance the sustainability of its external debt in recent years. The ratio of external debt to GDP has been reduced to a level of 3.6% in late June 2008, as a result of prepayments (from 2005) of debts owed mainly to multilateral institutions and bilateral creditors.
Monetary policy is focused on controlling the money supply by the Bank of Algeria in order to achieve the objectives of stabilizing inflation around 3.5%. According to Algerian Statistics Office (NSO), the average inflation rate in Algeria has reached 4.8% during the first quarter of 2008. The level of inflation is the result of the combination, firstly, the effects of international crisis and the unprecedented rise in prices of basic foodstuffs, and secondly, the impact the implementation of major projects of the state price and the increase in salaries in the public internally.
The Association Agreement with the European Union established a free trade area between the two parties, the integration of Algeria in the world trade has improved considerably: the non-oil exports from Algeria to the EU accounted for nearly 68.1% of total non-oil exports during the first eight months of 2008 against 40.8% over the same period in 2007.2 This increase of ‘global integration is also reflected in trade with Asian countries that have increased 36.12% between the first halves of 2007 and 2008 to reach 4.91 billion U.S. dollars. Furthermore, Algeria is a member of the Arab Maghreb Union. It has signed a framework agreement on trade and investment with the USA and took part in negotiations for the establishment of a Free Trade Euro-Mediterranean Area.