In other words, the bank is saying the currency isn’t sliding because of what they’re doing but because of what’s happening in the wider economy. They’re also pointing out that when people rush to buy dollars, whether for imports, savings or fear, that creates a shortage of dollars locally. When dollars get scarce, price goes up on the street which makes their dinar look weaker, even if the official rate hasn’t changed. From the CBI’s POV, the exchange rate gap isn’t proof of policy failure, it is a supply and demand issue plus market psychology. When people lose confidence or expect trouble they grab dollars…We appreciate the CBI explaining this…
