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Tunisia: Current deficit widening and inflation stabilizing at 4.8 pc

The Tunisia Central Bank ( BCT) Executive Board  met  on June 30, 2010.In a press release, it pointed out that, at the national level, progress in the manufacturing sector production and exports was pursued notably in export-oriented activities in line with better foreign demand. Foreign trade progressed significantly in particular for imports.

These trends yielded wider current balance deficit, over the first five months of 2010 compared to the same period of the previous year, requiring recourse to tapping on foreign currency assets for its coverage.

Financing to the economy continued to progress in line with the needs of the different productive sectors, posting 7.6% increase, over the first five months of the current year compared to 3.5% over the same period of 2009.

At the monetary level, M3 money supply went up by 3.9%, over the first five months of 2010, compared to 4.4% in the same period of 2009 following appropriate measures taken at the level of monetary policy, of which notably adjustment of the reserve requirement rate and mopping up of excess liquidity. The average interest rate came at 4.39% on 29 June, compared to 4.36% in May 2010.

These evolutions contributed to inflation stability at 4.8%, over the first five months of the current year, after coming to 5.2% in the beginning of the year.

The dinar exchange rate posted, from the beginning of the year and up to 29 June, 13.3% depreciation against the US dollar and 2.2% appreciation against the euro.
In light of these evolutions, the Executive Board decided to keep unchanged the key rate of the Central Bank, while continuing to closely monitor the economic situation, notably, at the level of foreign trade.

As for the international environment, it  was marked, at the end of June 2010, by indicators showing an overall improvement of the world economic activity in the main industrialized and emerging countries but with appearance of tensions due, notably, to prevailing situation at a number of European banks. In the same way, adoption of specific programmes by a number of European countries to reduce their budget deficit and hold down public indebtedness brings about rising worries with respect to the world growth outlook in this region. On the other hand, consumer prices continued to rise in the wake of higher demand and energy prices. The world commodities, foreign exchange and international capital markets continued to post fluctuations while the international community is working to reach a consensus with respect to the economic and financial policies that are likely to boost the economic recovery on sound and ever-lasting bases in a macro-economic stability framework


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