By Tarek Amara
TUNIS (Reuters) – Tunisia’s central bank held its key interest rate steady at 6.25% on Thursday, and expressed concern about the delay in securing foreign funding for the state budget for this year.
Tunisia, which is suffering its worst financial crisis, is in talks with the International Monetary Fund to obtain a financing programme to revive the ailing economy and access to external funding.
Tunisia’s Western allies have refrained from lending to the North African country due to a severe political crisis since President Kais Saied seized power in July in a move his opponents described as a coup.
In a statement, the central bank urged all key players in the country to reach agreement on economic reforms to pave the way to a new IMF financing programme.
The country requires an international rescue package to avert a disastrous collapse in public finances, with some state salaries delayed in January. Donors say Saied has not done enough to bring them on board.
They want him to embrace a more inclusive political process to ensure Tunisia’s young democracy survives, and strike a publicly-acknowledged agreement with his major rivals on unpopular economic reforms to tame spending and debt.
But Finance Minister Sihem Boughdiri said on Wednesday that Tunisia hoped to seal an agreement with the IMF in April.
The central bank said on Thursday it will use all available means to confront any expected rise in inflation, indicating that it may raise the key interest rate if the upward trend in inflation continues.
Tunisia’s annual inflation rose to 6.6% in December from 6.4% in November.
Tunisia’s remittances from workers abroad rose in 2021 to a record 8.6 billion dinars ($2.98 billion), the bank said. It added that the economy grew by 2.9% of GDP in 2021, with modest prospects in 2022.
($1 = 2.8823 Tunisian dinars)
(Reporting By Tarek Amara; Editing by Alex Richardson and Emelia Sithole-Matarise)
