Central Bank of Tunisia to Maintain High Interest Rate Amidst Inflation Concerns
While the European Central Bank (ECB) has recently lowered its benchmark rate to 3.75%, the Central Bank of Tunisia (CBT) appears determined to maintain its rate unchanged at 8%, according to financial analyst Bassem Ennaiefer.
Tunisian inflation, although on a downward trend, remains higher than in the eurozone. After reaching a peak of 9.2% in October 2022, it has stabilized at 7.2% in May 2024. Faced with persistent inflationary pressures, the CBT deems it necessary to maintain a high benchmark rate to anchor inflation expectations and protect price stability.
In contrast, the ECB is facing a slowdown in economic growth. By lowering its benchmark rate, it aims to stimulate economic activity and counter the negative effects of inflation on consumption and investment.
In addition to combating inflation, the CBT attaches paramount importance to protecting the Tunisian dinar. The country's foreign exchange reserves have experienced a significant increase, reaching 23 billion dinars in 2024 compared to 15.6 billion dinars in 2023. This influx of foreign currencies reinforces the solidity of the Tunisian dinar and contributes to maintaining investor confidence.
The CBT will maintain a prudent monetary policy, prioritizing price stability and the solidity of the Tunisian dinar. This approach is essential for preserving the country's economic stability in the face of internal and external challenges.