Press release of the BCT Executive Board Meeting held on 28 October 2015

During its meeting held on 28 October 2015, the Board was informed about the main trends in the international economic situation and reviewed the main economic, monetary and financial indicators as well as the latest trends in the national economic situation. The Board examined also the evolution of the banking sector, as well as transactions – and interventions of the Central Bank- on the money market and the foreign exchange market.
The Board discussed also overall the above mentioned evolutions and noted, particularly the downward trend in the expected economic growth rate for the current year (0.5%) according to the latest updated data of the economic budget and which would reach 2.5% next year. This points to the move of the national economy from a recession, currently, to a recovery concurrently with start-up of the 2016-2020 five-year plan, a recovery that is hopefully a sign of an upward positive growth.
Besides, and referring to the latest financial and monetary indicators, the Board  noted the slowdown in the financial system loans to the economy by financial sector ; which  hit most of the productive sectors. This reflects, weakening of demands for loans, notably investment-oriented ones as shown through the 3.3% increase in  the growth rate of financing to the economy, over the first nine months of the current year, compared to 6.8% for the same period of 2014.
In this context, the Board noted a tightening in the banking sector’s needs for liquidity, yielding a drop in the volume of refinancing by the Central Bank, down from 6.4 billion dinars on 14 July 2015 (the highest level from the beginning of the year) to 4.9 billion on 26 October of the same year, this would help maintain the interest rate on the money market at levels close to the BCT key rate, a positive trend revealing stabilization of this market.
As for inflation’s latest evolutions and anticipations, the Board noted  a net deceleration in the progress pace of prices recently, likely to be pursued up to the remaining period of the year. In fact, the average interest rate did not go beyond 4.2% over the third quarter compared to an average of 5.5% over the first half of the year, influenced mainly by easing of pressure on foodstuff prices, notably,   fresh products in line with, among others, weakening of demand in line with a drop in tourist activity, on the one hand, and stabilization of controlled products on the other hand. Worth of note that core inflation (exclusive of fresh and controlled products) remains at high levels (5.6% at end September, compared to 5.3% a year earlier).
After deliberations in the light of the above-stated trends, notably particularly those concerning recent trends in inflation, and to help stimulate investment and economic activity recovery, the Board decided to reduce by 50 basis points the key interest rate of the Central Bank of Tunisia , bringing it to 4.25%.
(For further data on the economic and financial situation, please refer to the Central Bank of Tunisia web site: