The Bank of Algeria urges banks to help maintain the country's financial stability
As oil prices plunge, banks are urged to strictly respect legislation.The Governor of the Bank of Algeria (BA), Mohamed Laksaci, urged banks and financial institutions in the country to strictly comply with their obligations in relation to foreign trade and foreign exchange transactions.
He said on Thursday (8 January) this will help maintain the financial stability of Algeria, as the economy faces repercussions from the recent drop in oil prices, which affects the balance of payments and public finances.
According to Mr Laksaci, oil-exporting countries are expected to see the balance of current accounts deteriorate while their fiscal space contracts.
"Given the likely acuity of an external shock in 2015, banks are expected to strictly comply with their obligations - as authorised intermediaries - especially with foreign trade and exchange operations in the context of the current dinar convertibility," he said, quoted by the newspaper La Tribune.
He explained that the BA will strengthen controls and ensure the banks' compliance with the new ratio commitments related to shareholders' funds, which went down from four to two per cent in December.
He added that in 2015, the rate of audits for transactions with foreign countries will also be accelerated.
"Risky activities such as import operations - those made from certain countries whose tax systems, customs and anti-money laundering are notoriously known for their laxity and tolerance - will especially be monitored," he said.