During and exceptional meeting held on March 14, the Executive Board of the Central Bank of Tunisia called for extreme caution and for adoption of a proactive approach so as to offset fallouts of the Russian-Ukrainian crisis on the national economic activity and overall balances.
The Board specified that at the international level, it is following very closely the fallouts of the Russian-Ukrainian war on the world activity, on the procurement channels and on the international prices of raw materials and basic foodstuff, which are likely to affect inflation strongly.
At the national level, the Board notes that soaring international prices of both commodities and energy, shrinking activity in Tunisia’s main trade partners and the climate of uncertainty, in the absence of any appropriate emergency measures, would lead to a worsening of the balance of current operations’ deficit and exacerbation of inflationary pressure over the forthcoming period.
Besides, it pointed out that recent developments will have a significant impact on budgetary balances, notably through a substantial increase in subsidies’ expenses. Such a situation should result in a widening of the budgetary deficit and generate, as a consequence, further important financing needs.
The Executive Board decided to keep the Central Bank of Tunisia’s key rate unchanged at 6.25%.
