hot - Algeria Urged to Convert US Dollar Reserves into Gold and Euro

Economic experts have urged the government to find more secured places for the country’s exchange reserves in US Dollar, elsewhere than the US Treasury, on the aftermath of downgrading of the U.S. credit rating for the first time ever from the country's elite AAA status to AA-plus, with a "negative outlook."

Analyst Bachir Messitfa told Echorouk reporter that the downgrade of the US credit rating on the long term will provoke an increase in the cost of credits for the US government, companies and consumers, and ultimately would shake trust in the US banknotes and the strips of the sovereign debts.

He urged the government to get rid of US Treasury bonds, as soon as possible, as the Central Bank of Algeria is losing money, because the US bonds in the international stock markets are heavily dropping.

He further recommended the government to reconvert its US dollar reserves into gold and Euro, to avoid the repercussions of the drop of the US currency purchase power.

Meanwhile, expert Abderahmane Mebtoul has warned that the downgrade of US credit rate will cause heavy drop in the prices of oil in international markets, noting that the barrel price has dropped by 10 USD in less than a week.

Professor Mebtoul further called on the government to open a national dialogue to discuss such an issue and review the monetary policy of the country, in terms of how the foreign exchange reserves should be invested, in order to preserve the wealth to the upcoming generations.
source  echoroukonline.