Tunisia’s Central Bank (BCT) Executive Board, meeting on Thursday, looked at the economic and financial situation, both at the domestic and international levels.
Focusing on the world juncture, the Executive Board pointed out that, despite an upward review in the world economic growth forecasts for the year 2010 as a whole, the international environment is still marked by persisting worries with respect to soundness of the economic recovery in the industrialised countries, mainly with disclosure of indicators, relative to the second quarter of the current year, that reflected a slower pace of the economic recovery compared to the previous quarter in most of these countries, excluding the European Union.
Against this background, the United States and Japan decided to set up new programmes to stimulate growth and (or) non-conventional measures for monetary policy easing.
The dollar’s exchange rate depreciated in September against the main foreign currencies, notably, the euro, while the increase in commodities prices and the volatility of stock indexes went on. At the national level, the economic activity was marked by an ongoing recovery in manufacturing industries; while production in the agricultural sector went down. Pressure on the balance of current operations was pursued due to wider trade deficit in the wake of faster progress in imports even with the relative improvement in exports.
Thus, the current deficit reached 3.6% of GDP at end August 2010 and its coverage required, further to net capital inflows, a recourse to a net tapping on foreign currency assets. These assets totalled, up to 28 September, 13,016 MTD or the equivalent of 153 days of imports.
At the monetary level, money supply rose, over the first eight months of 2010, by 7.1%, vs. 9.6% a year earlier, while financing to the economy grew at a faster pace over the same period, up by 13.4%, vs. 6.7% in 2009. Bank liquidity tightening went on in September, requiring intervention by the Central Bank to fine tune the market.
The interest rate came to 4.53% in average, vs. 4.61% in August. The dinar exchange rate appreciated, in September, by 3.8% against the US dollar and depreciated by 2.2% against the euro.
As for trend in prices, the inflation rate came, during the first eight months of the current year, to 4.6%, vs. 4.7% at end July and 3.3% in the same period of the previous year.
In the light of these evolutions, the Executive Board decided to pursue adoption of a monetary policy targeting inflation control, while ensuring appropriate financing to the economy by keeping unchanged the key rate of the Central Bank of Tunisia; and to continue to follow up trend in the international environment and its possible repercussions on the national economy and the balance of external payments in particular.