The Executive Board of the Central Bank of Tunisia held an exceptional meeting on Monday, March 14, 2022, to examine the economic and financial repercussions of the Russian-Ukrainian crisis.
At the international level, the Board said it was closely monitoring the repercussions of the Russian-Ukrainian war on global activity, on supply chains and on the global prices of raw materials and basic food products, which are likely to have a strong impact on inflation.
Nationally, the Board pointed out that the surge in international commodity and energy prices, the contraction of activity in Tunisia’s main trading partners and the climate of uncertainty, in the absence of urgent and appropriate measures, would aggravate the current account deficit and exacerbate inflationary pressures in the coming period.
The Board also noted that recent developments will have a significant impact on fiscal balances, notably through a sharp increase in subsidy spending. Such a situation is likely to lead to a widening of the budget deficit and, consequently, to significant additional financing needs.
The Board urged extreme vigilance, while calling for the adoption of a proactive approach in order to mitigate the repercussions of the Russian-Ukrainian crisis on national economic activity and overall balances.
It decided to keep the Central Bank of Tunisia’s key rate unchanged at 6.25%.
