The Tunisian Central Bank has opted to maintain its benchmark interest rate unchanged, according to a report by Bloomberg.
The ongoing political turmoil in Tunisia has hindered the necessary reforms required to secure a much-needed loan from the IMF.
Tunisia finds itself in dire need of financial assistance from the IMF, but political instability has complicated its efforts.
The Tunisian Central Bank has kept its benchmark interest rate at 8%, as announced by the regulatory body following a board meeting on Thursday.
The central bank has stated that the current monetary policy stance will support further inflation easing in the near future.
However, it cautioned that risks of additional inflation acceleration are significant.
In August, the annual inflation rate surged to 9.3%, breaking a downward trend that had persisted for most of the year, as reported by the agency.
The central bank has maintained interest rates unchanged since December when it raised them by 75 basis points.
It has expressed readiness to act if inflationary risks emerge in the coming period.
Tunisians have been grappling with chronic shortages of essential food items as the financially strained state has attempted to curb imports.
Many line up in the early morning hours to secure bread, while this year’s drought has impacted local wheat crops.
Shortages have also extended to sugar, coffee, milk, and recently even carbonated beverages due to a shortage of carbon dioxide in the country.
The government is expected to outline its budget plans by the end of October, which is likely to shed some light on its commitment to securing an IMF rescue plan.
The country‘s debt stands at 80% of its gross domestic product (GDP), and it is in dire need of financing to cover public sector salaries.
Economic indicators do not point toward an imminent resolution of the financial crisis.
The budget deficit reached 8% in 2022, with two-thirds of it stemming from subsidies for the energy sector, which saw increased prices due to Russia’s invasion of Ukraine, according to Bloomberg.
