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Tunisia dinar falls to record low against dollar

Tunisian dinar banknotes and coins inside a cash register at a store in the Ariana district of Tunis, Tunisia, on Friday, April 8, 2022. Turmoil triggered by rising food and energy prices is already gripping countries like Sri Lanka, Egypt, Tunisia and Peru. Photographer: Chedly Ben Ibrahim/Bloomberg via Getty Images

Central Bank of Tunisia data showed yesterday that the Tunisian dinar fell to a record low against the US dollar, causing concerns about a possible decline in foreign exchange reserves and rise in inflation, Reuters reports.

The annual inflation rate in Tunisia increased to 8.6 per cent in August, the highest level in nearly three decades.

The central bank said on Wednesday the dinar was trading at 3.309 dinars for the dollar, down by 17.5 per cent from its level a year ago.

The decline of the Tunisian dinar also increases the cost of debt servicing and is set to result in an increase in the budget deficit.

Last May, the dinar traded at 3.101 dinars to the dollar for the first time amid rising inflation rates and a widening trade deficit, all compounded by the severe impact of the Russian invasion of Ukraine on public finances.

READ: Tunisia court postpones appeal into case alleging involvement in sending jihadists abroad

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