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Tunisia: BCT expects current account deficit of around 10% of GDP in 2017

A Note published by the Central Bank of Tunisia (BCT)said the balance of current account has deteriorated further (-9.3% of GDP) in the first eleven months of 2017 compared to -8.1% in the same period a year earlier, suggesting a current account deficit of around 10% of GDP for the whole of 2017.
The size of this deficit puts pressure on the foreign exchange market which suffers from a structural deficit of foreign exchange resources, inducing more pressure on the dinar exchange rate and on bank liquidity, explains the BCT.
The overall balance of payments, which stood at -597 MTD vs. -1,943 MTD a year earlier, was felt by the size of the current account deficit.
Mitigation of the general deficit was supported by the mobilization of significant external resources, most recently the loan granted by the European Commission in October 2017 for 571 MTD and the improvement in FDI flows (+ 655 MDT).
The persistence of external imbalances weighed heavily on foreign exchange reserves which, for the first time since 2006, were below US $ 5 billion.
The dinar lost 17.3% and 6.1% of its value against the euro and the US dollar, respectively from the end of 2016 until December 15, 2017.

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