Tunisia: Fall in foreign currency reserves in Central Bank

Tunisia’s foreign currency reserves have fallen to record levels, according to data released on Thursday by the Central Bank of Tunisia.

The data published on the Bank’s website showed that “the foreign exchange reserves fell to 10.74 billion Tunisian dinars ($4 billion), covering the imports of only 70 days.”

The foreign exchange reserves covered only 90 days (about $4.2 billion) of imports in mid-August 2017.

The International Monetary Fund has recently approved the disbursement of the fourth loan to Tunisia worth $ 250 million.

In late 2016, Tunisia and the IMF reached an agreement to facilitate Tunisia’s $2.9 billion in loans over four years.

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Tunisia has long been suffering from an economic recession, reflected in the annual inflation rate of 7.8 per cent in June and the unemployment rate of 15.4 per cent in the first quarter of this year.

Tunisian Head of Government Youssef Chahed had previously stated that 2018 would be the last difficult public fiscal year and that the 2019 budget law would be much more comfortable and would not impose new taxes on companies.

The Tunisian government expected a 3 per cent growth in 2018.

To counter inflation, the Central Bank of Tunisia decided in mid-June to raise the interest rate by 100 basis points, rising from 5.75 per cent to 6.75 per cent per year.

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The Bank also stressed that the continued inflationary pressures are likely to go on during the upcoming period due to several indicators, including the expected rise in world prices of primary materials, especially energy, posing a threat to the recovery of the economy and the purchasing power of the citizens.