The Board of Directors of the Central Bank of Tunisia decided to raise the main interest rate by 75 basis points from 6.25 percent to 7 percent to combat high inflation, the first rate increase since 2019.
Inflation in Tunisia rose to 7.5 percent in April, from 7.2 percent in March and 7 percent in February.
According to the Central Bank, the current account deficit amounted to -2.7 percent of GDP in the first four months of 2022, compared to -1.7 percent in 2021, due to the worsening trade deficit.
Foreign exchange reserves amounted to 23.655 billion dinars ($7.76 billion), or 124 days of imports, on May 16, compared to 23.313 billion dinars, or 133 days of imports, at the end of 2021.
The Bank expressed its deep concern about the high inflation curve, and called for economic reforms as soon as possible to restore economic growth, in order to ensure macroeconomic stability and the sustainability of public debt. The Board of Directors of the Central Bank aims, through this measure, to address the looming inflationary pressures on the horizon of expectations, and to avoid any slippage in inflation and any exacerbation of the external sector deficit.
Source (Al-Arab Newspaper of London, Edited)
