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Tunisia: Central Bank keeps key interest rate unchanged

The Executive Board of the Central Bank of Tunisia held its regular meeting on October 31, 2018 and examined the various items on its agenda reviewing developments in economic, monetary and financial indicators.

The Board noted the continued pressure on the external sector, mainly due to a widening of the current account deficit, which reached 8.2% of GDP at the end of September, following the widening of the trade deficit by 23.5%, despite a clear improvement in tourism revenues.

This situation had a negative impact on foreign currency reserves and indirectly on the dinar exchange rate.

On the other hand, the Executive Board noted the persistence of inflationary pressures despite a slight easing. In fact, the consumer price index rose 7.4% year-on-year in September 2018, compared to 7.5% last August.

Regarding the follow-up of activities of the Central Bank of Tunisia, the Board examined the objectives and main features of the draft circular on the establishment of a new precautionary standard for loans and deposits and a publication on the internal control rules for the provision of the risks of money laundering and terrorist financing.

After discussions and deliberations, the Board underlined the need for further coordination with the various parties concerned in order to find the appropriate solutions to counteract the further widening of the current account deficit, and decided to keep the key interest rate of the Central Bank unchanged.

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