Tunisia Central Bank Executive Board met, on Thursday 29 April. It pointed out that, at the national level, export-oriented industrial production pursued recovery, in line with better external demand while trade deficit widened substantially in the wake of import rise at a faster pace than exports. Import rise involved notably energy, raw materials and semi-finished products. This led to an increase in the current deficit over the first quarter of the current year despite appearance of first signs of improved tourist indicators.
At the monetary level, M3 money supply progressed, in the first quarter of 2010 by 1.7% and financing to the economy rose, over the same period by 3.9%, a high pace reflecting the banking sector’s effort with respect to financing of the economy.
Excess bank liquidity was consolidated significantly in current April and the Central Bank of Tunisia had to intervene to mop up this surplus with an average amount of 833 MTD compared to 779 MTD in March. Day-to-day interest rate on the money market fluctuated in April between 4.03% and 4.32%, while the average interest rate came at 4.23% in the previous month.
The dinar exchange rate posted, as of the beginning of the current year and up to 28 April, 7.4% depreciation against the US dollar and a slight appreciation against the euro.
As for trend in prices, the inflation rate went up to 5.2% over the first quarter of the current year compared to 3.2% in the same period of last year.
In considering these evolutions, the Executive Board decided to keep unchanged the key rate of the Central Bank along with ongoing mop up of excess liquidity, while focusing on the need to appropriately follow up trend in the economic indicators, notably, inflation and external payments.
Regarding the international environment, it was marked, in April 2010, by better world growth prospects shown by the increase in the international Monetary Fund world growth forecasts for the current year, up to 4.2% compared to 3.9% announced last January and 0.6% in recession recorded over 2009. However, worries tied to sovereign risk in the wake of the public indebtedness crisis increased, mainly following the review by specialized agencies of sovereign rating for a number of European countries. This affected the world stock markets and the exchange rate of the main foreign currencies that posted sharp volatility. These trends would in fact be reflected on growth prospects in Europe.