The dinar is the official currency of Algeria. This decimalised currency can be subdivided into 100 santeem. The word dinar is a derivative of the ancient Roman currency, the denarius. The Bank of Algeria, the nation’s central bank, issues the dinar.
At the start of the 19th century, the currency of Algeria was the budju. The budju was a non-decimalised currency subdivided according to the following scheme: 1 budju = 24 muzuna, 1 muzuna = 2 kharub and 1 kharub = 29 asper. When France occupied Algeria in 1848, this currency system was replaced by the Algerian franc, which was equivalent to the French franc. In order to maintain this equivalency, a new Algerian franc was introduced in 1960, replacing the old Algerian franc at a rate of 100 old francs: 1 new franc. Algeria gained its independence from France in 1962 and introduced the Algerian dinar in 1964.
One of the original laws of the newly independent Algerian nation called for the establishment of the Bank of Algeria. The powers of the Bank of Algeria were expanded through adjustments in the law in the 1970s and 1980s as an initiative to reform and refine Algeria’s currency and banking systems. The Bank of Algeria now has the power to define and implement monetary and credit policy. Further refinement of the Algerian banking system was completed in 1990, giving the Bank of Algeria a greater degree of autonomy. The Bank of Algeria is managed by a governor and a Board of Directors, consisting of three deputy governors and three civilian economic experts. The governor and the Board of Directors are appointed by the President of Algeria. Besides maintaining currency, foreign exchange and credit, the Bank of Algeria also manages how commercial financial institutions may operate by setting national standards.
The Algerian dinar began circulation in 1964 through a series of coins and banknotes. The first coins minted were in denominations of 1, 2, 5, 10, 20 and 50 santeem and 1 dinar. These coins were replaced in 1992 with coins starting at denominations of 25 santeem and 50 santeem. Higher denomination coins consist of denominations of 1, 2, 5, 10, 20, 50 and 100 dinar. Today, denominations less than 5 dinar are rarely circulated, and most prices are rounded to the nearest 5 dinar. Current banknotes in circulation include denominations of 200, 500, 1000 and 2000 dinar.