Press release of the BCT Executive Board meeting held on 25 April 2017

The Executive Board of the Central Bank of Tunisia held on 25 April 2017 an exceptional meeting to examine the recent trends on the exchange market which recorded, over the last week, increasing pressure in line with operators’ increasing demand for foreign currency, yielding thus a sharp depreciation of the dinar, notably against the dollar and the euro.

When examining the above-mentioned trends, the Board affirmed that the objective data as well as the available economic and financial indicators can in no way justify the fluctuations recorded on the exchange market and the sharp depreciation of the dinar against the main foreign currencies, especially that the discussions that were recently held between the Tunisian Authorities and the IMF mission in the framework of the extended credit facility review, were globally positive and encouraging.

Moreover, the Board underlined that the adopted monetary and exchange policy do neither target devaluation of the national currency, nor a target exchange rate and not even a floating of the national currency, but proceeds rather through ordered, well-calibrated interventions to smooth out the sharp variations of the exchange rate while seeing to boost the exchange rate role to contain the trade deficit slippage on the one hand, and ensure financing of the necessary imports and preserve an appropriate level of foreign currency reserves on the other hand.

As for trend in prices, the Board noted that inflationary pressures post an upward trend compared to the previous months. It should be mentioned that preliminary available data indicate risks of an ongoing pressure on the short term.

When examining the bank liquidity situation, the Board pointed out that banks’ needs remain at high levels  given a weak level of national savings, and discussed as a result the means likely to boost savings in order to reduce pressure on the economy’s liquidity.

In the light of what was stated previously, and in considering the pressure recorded recently on the exchange market, following exaggerated speculative position-taking or unfounded worries, yielding liquidity shortage, the Board pointed out that the Central Bank continues to adopt the required flexibility in its monetary and exchange policy conducting in a way to ensure the market liquidity.

Meanwhile, the Board insists on the efficiency of these policies to curb the current deficit slippage and calls for rationalizing the use of foreign currency resources and refraining from all unwarranted practices which are detrimental to sound functioning of the foreign exchange market and likely to threaten its stability; which might affect more globally the macroeconomic balances.

The Board wants also to reassure both the operators and the public with respect to the pursuit of a regular functioning of the foreign exchange market and the ongoing monitoring of the Bank to ensure smooth running of transactions while maintaining the foreign currency reserves at comfortable levels.


After deliberations, and to reduce inflationary pressure risks on the one hand, and boost savings and boost liquidity on the other, the Board decided to raise the key interest rate of the Central Bank of Tunisia by 50 basis points, bringing it to 4.75%, and to increase the minimum savings remuneration rate by 50 basis points, to bring it to 4%. Hence, the Central Bank will continue to closely follow up trends in the economic situation, and particularly the inflationary pressures in order to undertake the appropriate actions on time.