Tunisia: BCT Executive Board keeps key interest rate unchanged

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    The Central Bank of Tunisia (BCT) Executive Board meeting on May 15, decided to keep the key interest rate unchanged.

    The Board pointed to the persistence of inflationary pressures – inflation stood at 7.7% at the end of April 2018 year-on-year – noting that the pace of price change is likely to negatively impact the economic recovery. This requires precise monitoring of the causes of inflation, better co-ordination of economic policies and implementation of appropriate mechanisms to mitigate its effects.

    The board approved the inking of two loan agreements granted by the Arab Monetary Fund (AMF) to Tunisia, worth a total of US$161 million.

    The 1st is part of the compensatory financing framework while the 2nd aims to support the promotion of an environment conducive to the development of Tunisian Small and Medium- Enterprises (SMEs).

    The Board reviewed the recent developments in the economic, monetary and financial situation.

    The Tunisian economy achieved a 2.5% GDP growth year-on-year at the end of the 1st quarter of 2018, compared to the 1st quarter of 2017, and a 1% growth compared to the 4th quarter of 2017, compared to 1.9% and 0.7%, respectively, in the same period last year.

    This growth is the result of a significant change in the added value of most productive sectors, including agriculture and fisheries (11.9%), market services (3.3%) and manufacturing industries (2.4%) compared to a decline by 5.3% in the added value of non-manufacturing industries.

    The regular meeting of the BCT Executive Board also examined the current state of the international financial market, the possibilities of mobilizing financing and the practical aspects that could be undertaken to this end.

    The meeting also reviewed a report on the management of foreign exchange reserves during 2017 and discussed the strategy to be adopted in this field in 2018.

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