The Executive Board of the Central Bank of Tunisia (BCT) decided at its meeting Tuesday to cut the key interest rate of the Central Bank by 100 basis points to 6.75%, the Bank said in a statement.
The Board considers that “if the spread of the virus is not controlled, the performance of the tourist sector, as well as that of the air and sea transport sectors and the industrial sector could decline, as a result from falling exports after lower demand from partner countries affected and difficulties in importing raw materials and semi-products, particularly from China.”
It expressed in this statement its intention to “closely monitor this exceptional situation”… “characterized by a lack of visibility as to the expected impact of the coronavirus”, according to the same source.
The Board stressed the Central Bank’s willingness “to take the necessary measures to meet banks’ liquidity needs and to support all efforts to contain this crisis and its implications for economic activity in general and for businesses in particular”.
Regarding the evolution of prices, the Executive Board noted “the slowdown in the inflation rate which dropped to 5.8% in February 2020, year-on-year, compared to 5.9% the previous month and 7.3% in the same month of the previous year, noting that this development is due “mainly to the deceleration of food and manufacturing prices”.
As regards the external sector, “the Board noted the decrease in the current account deficit in the first two months of 2020 to 1% of GDP compared to 1.4% in the same period of the previous year, particularly as the pace of widening of the trade deficit slowed down.
Following these developments, net foreign exchange reserves reached 19,104 MD or 109 days of imports at the end of February 2020 against 14.318 MD or 84 days of imports one year earlier”.
Earlier, the BCT reported that they amounted on March 16, 2020 to 19.7 billion dinars, against 14.3 billion dinars on the same date of the previous year, i.e. 113 days of import, against 84 days of import in March 2019.
Due to the expected impact of the coronavirus on the economic and social situation in Tunisia, professional organizations have called for measures to support businesses, including the revision of the interest rat