Tunisia’s central bank maintains key rate on hold at 4.5% on subdued economic growth

By bne IntelliNews March 27, 2014

Tunisia's central bank (CBT) left the benchmark interest rate unchanged at 4.5%, underscoring a mild economic recovery seen in the first two months of the year. The CBT, however, underscored that economic growth remains below expectations, revising downwards its GDP growth for 2014 to 2.8% from the previous 3.5%. The downward revision is due to lower expectations concerning the manufacturing and trade sectors.

The central bank warned that the current macro-economic indicators remain below the government’s aspirations for economic development and job creation.

As to inflation, the CBT underscored that inflationary pressures have mildly eased in February when CPI inflation cooled to 5.5% y/y from 5.8% the month before due to lower fresh produce costs. The core CPI inflation also retreated to 6.2% y/y in February from 6.3% the previous month, the CBT noted.

Tunisia’s external position has also weakened so far in 2014 as the current account deficit widened to 1.5% of GDP in January-February from 1.2% of GDP a year earlier. This was due to the widening foreign trade gap.

FX reserves, however, remained strong totalling TND 11.475bn as of March 25, covering 105 days of imports, the CBT estimated.

The Tunisian dinar has appreciated by 4.2% and 3.8% against the USD and the EUR so far in 2014 up to March 25, the central bank said. In 2013, the dinar depreciated by 9.7% against the EUR and 5.8% against the USD.

The central bank also noted the rising liquidity needs of the banking sector in March with the inter-bank interest rates inching up to 4.72% in March from 4.68% in the month before.

Related Articles

UAE to buy major stakes in Kazakh special economic zones

The United Arab Emirates’ (UAE’s) global port operator Dubai Ports World on March 24 signed two framework agreements to acquire stakes in Kazakhstan’s two Special Economic ... more

Survival of Iran nuclear deal appears far less likely under US Secretary of State Mike Pompeo

The odds on the Trump administration attempting to kill the Iran nuclear deal substantially shortened on March 13 with the firing-by-tweet of US Secretary of State Rex Tillerson and his replacement ... more

Billion-dollar petrochemical facility to be built in Turkey by Algeria's Sonatrach

Algerian national energy company Sonatrach has struck a deal with Turkey's Ronesans and Bayegan to build a petrochemical plant worth $1bn in Turkey, Turkish President Recep Tayyip Erdogan said on ... more

Dismiss