Tunisia’s Central Bank holds key rate at 8%

The Central Bank of Tunisia (BCT) announced on Saturday December 28 its decision to maintain the key interest rate at 8%, following a meeting of its board of directors. This decision reflects the Bank’s cautious approach to stabilizing the economy while carefully navigating inflationary pressures and broader economic uncertainties.

In its official statement, the BCT emphasized that the decision aligns with its strategy to harmonize borrowing costs with inflation forecasts. According to the bank’s projections, inflation is expected to average 7% for the current year and decline to 6.2% by 2025. By holding the key rate steady, the central bank aims to balance the dual objectives of fostering consumption and investment while keeping inflationary trends under control.

This policy choice underscores the BCT’s commitment to cautious and measured economic management. Tunisia’s economic landscape has been marked by fluctuating global commodity prices, constrained fiscal space, and external financing challenges. Against this backdrop, the central bank’s emphasis on stability sends a clear message of prudence and resilience.

Inflation control remains a top priority, given its impact on the purchasing power of citizens and business operating costs. By keeping borrowing costs unchanged, the BCT seeks to avoid dampening private sector investment and consumer spending, both critical to economic recovery.

The decision to hold rates steady has been met with mixed reactions from various economic actors. Businesses reliant on credit have expressed concern over high borrowing costs, which they argue could stifle expansion and competitiveness. On the other hand, maintaining the rate is seen as a necessary measure to mitigate inflationary risks, particularly as Tunisia faces external economic headwinds.

Observers will closely monitor the coming months to evaluate the effectiveness of this monetary policy.