The 2024 Currency Market: A Year of Ups and Downs
The 2024 currency market has been relatively calm, with the dinar gaining 2.1% against the euro and 6.4% against the yen, but losing 3.7% against the US dollar. In terms of average annual performance, the dinar depreciated simultaneously against the euro and the US dollar by 0.2%, while appreciating by 7.2% against the yen.
The market has been dynamic, with the volume of foreign exchange transactions against the dinar on the spot market totaling 24,762 million dinars (Mtnd) by the end of 2024, up 16.7% from 21,218 Mtnd the previous year.
This growth is mainly attributed to the increase in transactions with the Central Bank of Tunisia (BCT), which rose from 8,966 Mtnd at the end of 2023 to 12,192 Mtnd at the end of 2024. The BCT intensified its intervention in the market to absorb the excess liquidity in foreign currencies that characterized the market situation since April 2023. Additionally, it needed these currencies to repay sovereign debts. Meanwhile, transactions between banks evolved from 12,252 Mtnd in 2023 to 12,570 Mtnd a year later, representing a 2.6% increase.
So far this year, the dinar has already gained 1.91% against the euro, but lost 1.70% against the US dollar. According to current market trends, the euro is expected to gradually recover. This morning's inflation figures showed a decline in prices, and the European Central Bank is expected to reduce its interest rate next Thursday, giving a boost to growth.
