Press release of the BCT Executive Board Meeting held on 31 May 2019

The Executive Board held its periodic meeting on 31 May 2019 and examined issues scheduled in its agenda. The Board analysed the recent trends at the economic, monetary and financial levels, notably, the results recently disclosed with respect to economic growth, the rate of which came to 1.1% in annual shift, over the first quarter of 2019 compared to 2.7% in the same period of the previous year. This was in line mainly with the decrease in the added value of the agricultural and the industrial sectors compared to firming up of activity in services, notably, tourism.

On another level, the Board underlined the drop in the inflation rate at 6.9%, in annual shift, over April 2019, compared to 7.1% in the previous month, following notably, a decrease in the progress pace of foodstuff prices (6.6% vs. 7.5%).

The Board considered the latest developments of the external sector and noted the reduction in the current deficit over the first three months of 2019, before posting a widening, at the end of April to reach 4,505 MTD or 3.9% of GDP compared to 3.6% a year earlier. Worth of note that its level in foreign currency remains stable over the same period, contrasting with a worsening of its level both in dinars and in foreign currency over the same period of last previous years.

These trends reflect, partly, contribution of the monetary policy adopted by the Central Bank as of last year, aiming to reduce internal and external balances.

Net assets in foreign currency posted a decrease that came to 13,050 MTD or 74 days of imports compared to 13,974 MTD or 84 days at the end of 2018. This drop is, mainly, attributable to reimbursements of external debt service along with the delay in certain drawings on scheduled external financing.

On another level, the Board examined the evolution of the banking sector activity and its financial balances, considering the latest indicators of the banking activity, marked notably, by ongoing pressure, while highlighting that the Central Bank continues to closely follow banks situation vis-à-vis the relevant prudential norms, and this to maintain stability of the sector overall.

After discussions and deliberations on the above-mentioned issues, the Board underlined the need to continue to closely monitor trends in the economic, monetary and financial indicators and decided to keep unchanged the key interest rate of the Central Bank of Tunisia.