Tunisia’s central bank kept its key interest rate unchanged at 8% with inflation in retreat and the government engaged in ongoing negotiations with the International Monetary Fund over a reform agenda and bailout package.
The bank raised its key interest rate by 75 basis points to 8% in December to combat high inflation, implying its third rate increase of the previous year.
In May, the annual inflation rate declined to 9.6% from 10.1% in April and a peak of 10.4% in February.
The bank stated in a statement that the current monetary trends would contribute to lowering inflation rates in the upcoming period.
Last week, the global credit rating agency Fitch downgraded Tunisia’s credit rating to ‘CCC-‘ from ‘CCC+’, citing uncertainty regarding the country’s ability to raise sufficient funds to satisfy its financing needs.
The central bank warned in a statement that Fitch’s decision will impact the nation’s ability to obtain foreign financing on favorable terms.
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