Tunisian Central Bank Holds Key Rate With an Eye on Inflation

TUNIS (Capital Markets in Africa) – Tunisia’s central bank left its benchmark interest rateunchanged as it monitors the effects of last month’s hike on inflation.

The key gauge was held at 7.75 percent, the Central Bank of Tunisia said in a statement on Friday. The bank raised the rate by 100 basis points last month, the first increase since June, citing a need to curb price growth.

Inflation accelerated to 7.3 percent in February from 7.1 percent a month earlier. It reached 7.7 percent in mid-2018, the highest rate in 25 years.

“This situation necessitates close monitoring of the sources of inflation and more coordination in economic policies and implementing the appropriate mechanisms to curb its dangers,” the bank said Friday.

The North African country is implementing a program backed by the International Monetary Fund to stabilize its public finances and spur economic growth.

Growth was 2.5 percent in 2018 from 1.9 percent in the previous year, boosted by increased farm output and a better performance in Tunisia’s services industry. The country’s key tourism industry showed signs of recovering last year from terrorist attacks in 2015.

Source: Bloomberg Business News