The Executive Board of the Central Bank of Tunisia (BCT) decided at its meeting on August 29, 2018 to maintain unchanged its key interest rate at 6.75%.
After reviewing recent economic, monetary and financial indicators, the Board pointed to continued inflationary pressures, despite a slight improvement in the inflation rate recorded in July (7.5% yoy), which could negatively impact the country’s economic growth.
The Board noted the worsening of the trade deficit mainly due to the deterioration of the energy balance deficit, resulting essentially from the faster pace of growth in imports of energy products, which exceeded that of tourism receipts and exports and accumulated labor income.
To this end, the Board called for more coordination with the competent authorities in order to find adequate solutions to curb the worsening of the energy deficit, given its negative impact on foreign exchange reserves and, above all, on the value of the dinar.
Moreover, as regards the monitoring of the bank liquidity situation, which is also affected by the external sector deficit, the Board expressed its concern about the increased evolution of the banks’ refinancing volume with the BCT. It stressed the importance of taking new decisions to curb this phenomenon.
After discussion and deliberation on the above mentioned points, the Board insisted on the importance of closely monitoring the evolution of the monetary and financial indicators and decided to keep the central bank’s key interest rate unchanged.