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Press release of the Central Bank of Tunisia Executive Board meeting held on 18 January 2011
In the beginning of its works, the Board went over the economy balance sheet in 2011 which was marked by a negative evolution of production and exports in most of the sectors, a drop in both domestic and external investment as well as a decrease in job creation and worsening of financial balances in the wake of the exceptional situation that the country has witnessed. Thus, the last forecasts account for a negative growth.
The Board noted in particular a worsening in the current deficit of external payments, representing 7.1% of GDP in 2011, in line with tighter level of exports in non-manufacturing industries and services. As a result, there was a drop in the level of foreign currency assets to some 10,582 MTD or the equivalent of 113 days of import compared to 147 days a year earlier.
At the monetary level, M3 money supply and financing of the economy posted a slower progress pace, coming to 7.9% and 13.2% respectively at the end of 2011. Bank needs in liquidity went up markedly, requiring more important intervention of the Central Bank on the money market which came to an average 3,604 MTD in December 2011 and 3,893 MTD in the first sixteen days of current January and this to help the banking sector provide the necessary financing to businesses and investors. Average interest rate on the money market came to 3.19% as of the beginning of current January compared to 3.23% in December 2011.
As for trend in prices and in the wake of pressure recorded starting last summer on the prices of some products, notably foodstuffs, the inflation rate came to 3.5% for 2011 as a whole compared to 4.4% in the previous year.
The Board examined also outlook for the evolution of the national economy for 2012 which, despite a stability at the political level, is still marked by an ongoing social pressure and difficulties of the international environment, mainly in the euro zone. The latter posted recently a financial downgrading of several countries in line with the sovereign debt crisis.
In the light of these evolutions, the Executive Board decided to keep unchanged the key rate of the Central Bank of Tunisia, stressing the necessity for the banking sector to mobilize long term resources to pursue its role of financing of the economy. On another level, the Board called to work out a development plan and adopt a clear economic and financial policy while setting a financing programme that takes into account the country’s capacity to mobilize internal and external resources and maintain global balances. Besides, the Board highlights the need to associate efforts to ensure return back to security and social stability in a way to resume the normal pace of the economic activity in the best possible deadlines.
(For more information on the economic and financial situation, refer to the web site of the Central Bank of Tunisia www.bct.gov.tn)
Press release of the Central Bank of Tunisia Executive Board meeting held on 14 December 2011
The BCT Executive Board Meeting held on 14 December 2011, focused in the beginning of its works on the institutional status of the Central Bank and recalled with satisfaction the reaction of the National Constituent Assembly to the BCT communique of 1st December. Worth of note that this communique calls for reinforcing independence of the Issuing Institution and setting this principle in the constitution.
Indeed, the Constituent Assembly has devoted in the constitutive law, providing for provisional organization of public authorities, an article specific to the Central Bank including mechanisms that ensure certain bases of its independence and sense of responsibility. This represents a clear message that is likely to help restore confidence among the economic operators.
The Board went over trends in the national and international economic situation over 2011 and recorded the ongoing deterioration of the world economic situation and the slowdown of growth pace, notably in the Euro Zone and their repercussions on the national economy. Internal difficulties, along with deteriorated external situation brought about a wider current payment deficit which came to 6.5% of GDP at end November 2011. Foreign currency reserves totalled 10,504 MTD or the equivalent of 113 days of import up to 13 December 2011 compared to about 5 months at end 2010.
At the monetary level, the Board noted an ongoing increase in bank needs for liquidity over current December. This required an intervention by the Central Bank to back up the banking sector in its effort to finance businesses by injecting an average amount of some 3,616 MTD. The money market average interest rate came to 3.39% in the first period of December compared to 3.16% in November.
As for prices, the Board noted that the inflation rate reached an average of 3.5% at end November 2011, with certain regression in inflationary pressure as of November 2011 .
In the light of these evolutions, the Executive Board decided to keep unchanged the key rate of the Central Bank of Tunisia and recommended to pursue supply of needed liquidity to banks so as to help them finance businesses and stimulate recovery of the economic activity.
(For more information on the economic and financial situation, you can refer to the web site of the Central Bank of Tunisia www.bct.gov.tn)
Press release of the Central Bank of Tunisia Executive Board meeting held on 1 December 2011
The Executive Board of the Central Bank of Tunisia held an extraordinary meeting during which it has pointed out the ongoing economic difficulties, warning against the risk of their worsening leading to a situation of crisis, all the more that the scope of action at the level of monetary policy has become very limited, within a context of a difficult world economic situation, especially in the main European partner countries, having brought about negative fallouts on the production pace and exports of national economy main sectors.
While waiting for a better visibility as regards economic policies, uncertainty and hesitation are going on for local and foreign investors concurrently with the deterioration of many economic and financial indicators.
In this regard, the Board calls all the intervening parties to show wisdom and diligence so as to ensure the start up of the Government’s action and the comeback of the normal operating of the State’s structures and public services at the earliest convenience. The objective is to manage restoring confidence and to give impetus to economic activity and employment. Likewise, accelerating the adoption of the State Budget and the law of finance for 2012 constitute one of the main factors that are able to give a clear signal in this regard.
During this meeting, the Board has also looked into the proposed institutional status for the Central Bank of Tunisia within the framework of the draft on the provisional organization of public powers. This draft tends to submit the Central Bank of Tunisia to the government’s authority, contrary to expectations aspiring to consolidate the independence of the Bank of issue to ensure the missions pertaining to it in the monetary and banking fields with the required efficiency.
Hence, the Board recalled that the independence of Central Banks and of control and regulation authorities remain one of the main orientations and evolutions aiming at ensuring financial stability and establishing principles of sound governance in developed democratic systems and in many developing countries which have made noticeable progress in this field.
Assuming this, The Executive Board of the Central Bank of Tunisia calls not only for the preservation of the situation, prevailing notably since 14 January, which is marked by a wide scope of the Central Bank independence but mainly for the consolidation of its independence by including it in the law organizing public powers and enshrining it in the constitution. The Board has also underlined the necessity to set conditions guaranteeing the independence of the Central Bank of Tunisia, particularly criteria of the Governor’s nomination and removal, the appointment of Executive Board members, as well as intervention and control modalities and mechanisms of responsibilisation and assessment of the Bank’s efficiency.
(For more information on the economic and financial situation, you can refer to the web site of the Central Bank of Tunisia www.bct.gov.tn)
Press Release of the BCT Executive Board Meeting Held on 16 November 2011
The Board has reviewed the trend of the national economic situation as of the first half of November 2011 which was marked by ongoing climate of wait-and-see policy after the completion of the electoral process.
On the international level, the Board considered the repercussions of the sovereign debt crisis in the euro zone countries and their negative fallouts on the economic relationships with Tunisia. It highlighted, in this context, the ongoing pressure on economic activity, notably the slowness of growth pace, slowdown of exports, regress in tourist receipts and the shrinking of both domestic and external investment.
At the level of external payments, these trends meant a higher current deficit, reaching 5.7% of GDP at the end of October of the current year. As a consequence, the level of reserves in foreign currency continued to drop, posting 10.551 MTD or the equivalent of 114 of imports, as of 14 November, against nearly 5 months at the end of the previous year.
On the monetary level, bank liquidity was further tightened in November, which required an increasing intervention of the Central Bank in order to allow the banking system to carry on with corporate financing as reflected by the progress by 11.8% of financing the economy over the first ten months of the year while deposits at banks increased only by 3.6%. Likewise, money market average rate posted 3.25% as of 13 November compared to 3.32% in October.
As for prices trend, the Board has registered, since last August, an acceleration of inflation, reaching 3.4% as of October 2011 due notably to persisting pressure on the prices of a certain number of food products.
In light of these trends, the Executive board decided to keep unchanged the key interest rate of the Central Bank of Tunisia and recommended to monitor the trend of the financial crisis in Europe and its impact on the Tunisian economy, especially that many indicators reflect the fragility of the economic situation. This makes more difficult the achievement, in 2011, of a positive growth in a context where the scope of intervention of monetary policy to support economic activity has become limited.
(For more information on the economic and financial situation, you can refer to the web site of the Central Bank of Tunisia www.bct.gov.tn)
The Central Bank of Tunisia (BCT) will put into circulation, starting from 03 November 2011, a new 50 dinar 2011 type Tunisian banknote being legal tender.
The Central Bank of Tunisia (BCT) will put into circulation, starting from 20 October 2011, a new 20 dinar 2011 type Tunisian banknote being legal tender.
Press Release of the BCT Executive Board Meeting Held on 19 October 2011
The Executive board took stock of the trend of national economy as elections are drawing nearer and registered the ongoing improvement of economic activity thanks to the performance of the agricultural compaign and the progressive increase in the production of mines, phosphates by products sector.
As far as external trade is concerned, the Executive board noticed the deceleration of manufacturing industries exports following external demand shrinking from the EURO zone which is experiencing difficulties in the wake of sovereign debt crisis persistence.
The Board also noticed the increase in current deficit which reached 5% of GDP at end September 2011 following the drop in Tourism earnings and workers remittances of Tunisians living abroad which led to a decrease in net assets in foreign currencies to 10,579 MTD corresponding to 115 days of imports as of 17 October 2011 against 147 days at end 2010.
On the other hand, the Board noticed the reapperance of pressures on bank liquidity during October first eighteen days which required an increased intervention of the Central Bank through an injection of an average package of 3,673 MTD on money market. Consequently, average interest rate on this market rose during this same period to 3.52% vs 3.24% in September.
As for prices, the Board pointed out inflationary pressures emergence during the last period particularly for certain foodstuffs requiring further follow up and watchfulness.
In light of these trends, the Executive board decided to keep unchanged the key interest rate of the Central Bank of Tunisia and focused on the necessity to keep on managing to restore economic operators confidence in this historical stage of elections and during the period coming ahead in order to consolidate economic activity.
(For more information on the economic and financial situation, you can refer to the web site of the Central Bank of Tunisia www.bct.gov.tn)
Press Release of the BCT Executive Board Meeting Held on 29 September 2011
Reviewing the national economic situation at the end of September 2011, the Executive Board noticed the appearance of positive signs in the trend of economic activity reflected by the lessening of the drop registered in the tourism sector and the revival of activity in some other sectors that have been mostly hit since the beginning of the year in addition to the gradual improvement in trade with Lybia and stock market indicators positive trend.
On the monetary level, the Board noticed the lessening of pressures on bank liquidity during August and the pursuit of this trend in September which led to a reduction in the Central Bank intervention on money market. Moreover, the reduction in the Central Bank key interest rate to 3.5% beginning September induced a decrease in money market average rate at 3.2% vs 3.76% the previous month.
Undertaken measures on the monetary level helped banks pursuing their efforts of financing the economy at a sustained pace with a 10.5% increase in financing the economy since the beginning of the year. Also, discount portfolio rose by 8.5% during the same period which is a positive indicator reflecting economic activity progress.
On the other hand, assets in foreign currencies registered a virtual stability compared to August reaching on 29 September 10850 MTD corresponding to 120 days of imports.
Moreover, the Board considered the trends in international environment in particular sovereign debt crisis in the Euro zone and the risks of impact on natioanl economy and recommended to manage to face these repercussions notably through the follow up of these trends and the undertaking of appropriate measures if needed. The Board recommended also to consolidate the registered positive signs on the national level through notably a more sustained activation of public finance policy.
In light of these trends on the internal and external levels, the Board decided to keep unchanged the key interest rate of the Central Bank of Tunisia and recommended to start the working out of an upgrading program of the financial system in order to consolidate its soundness and develop its interventions to ensure economic activity revival.
(For more information on the economic and financial situation, you can refer to the web site of the Central Bank of Tunisia www.bct.gov.tn)
Press Release of the BCT Executive Board Meeting Held on 05 September 2011
Examining the trends of the national economic situation, the Executive Board expressed his concern regarding negative growth pursuit arising from activity slowdown in some important sectors such as non manufacturing industries and services and the decrease in private investment and FDI. This led to increased pressures on the balance of payments and consequently the shrinking of assets in foreign currencies which regressed to 11,067 MTD corresponding to 123 days of imports at end August 2011 against 147 days at end 2010.
On the other hand, the Executive Board noted the persistence of economic difficulties in spite of efforts made at the level of monetary policy through the decrease of reserve requirements to their minimum level and the reduction of the Central Bank key rate. This situation is connected with the persistence of social and safety stability climate and the absence of visibility for economic operators and the spread in growth pace with respect to the expected outlook in a world economic environment that is not favoring raising external resources.
As far as banking sector activity is concerned, liquidity tightening continued till August which required an increased intervention of the Central Bank to inject 3,148 MTD against 2,953 MTD in July. This intervention helped, concurrently to the decrease in the Central Bank key rate, to reduce money market average rate to 3.76% vs. 4.25% a month before.
In light of these trends, the Executive Board recommended to keep on consolidating the pace of financing the economy through an active monetary policy while seeing to implementing a budgetary policy favoring much rapidity in achieving projects and financing public entities.
Thus in order to revive economic activity and achieve investment projects by reducing companies financial charges, the Executive Board decided to reduce once again the key rate of the Central Bank by half percentage point to regress it to 3.5% while seeing to consolidate banking sector resources through the preservation of remunerating deposits on savings pass books.
(For more information on the economic and financial situation, you can refer to the web site of the Central Bank of Tunisia www.bct.gov.tn)
The aide-mémoire relating to preliminary conclusions of staff visit respect to the IMF Article VI held in Tunis from 14 to 28 May 2007.
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