ABU DHABI, Sept 29 Tunisia's monetary policy is
still in a tightening mode and the central bank will intervene
with various tools, including interest rates, if inflation
starts climbing again, Tunisian central bank governor Chadli
Ayari said on Sunday.
Speaking to reporters on the sidelines of a meeting of Arab
central bankers in Abu Dhabi, he also said the country's foreign
exchange reserves had rebounded to about 103 days' worth of
imports, which was a "more or less safe" level.
Tunisia has been struggling with high inflation and pressure
on its foreign reserves as it negotiates a political crisis. The
Islamist-led government agreed on Saturday to resign after talks
with secular foes to form a caretaker administration, which will
prepare for elections in an effort to safeguard the transition
Inflation fell for the second month running to reach 6.0
percent in August, compared to March's 6.5 percent, which was
the highest rate in at least five years. The central bank raised
its key interest rate by 0.25 percentage point in March, its
second rate hike in seven months, to fight inflation.
According to official data, foreign currency reserves on
Sept. 25 totalled 11.291 billion dinars, the equivalent of 103
days of imports, after inflows of foreign aid and an overseas
bond issue. In June, reserves had dropped to 94 days.
In a statement on Thursday, an International Monetary Fund
mission to Tunisia said: "Fiscal and external imbalances are
continuing to worsen, and the reforms (most of which are already
in progress) are facing some constraints and are proceeding more
slowly than anticipated.
"The short-term risks are on the downside, and vigorous
measures - including in the implementation of reforms - are
essential, notwithstanding the constraints associated with
Ayari said on Sunday: "We will see if the increase of the
rate of interest is justified or not. That depends on different
factors including how inflation is behaving. So far we still
have a rather high rate of inflation but it is starting to
stabilise...and we expect it to decrease."
He added, "If by any bad luck we see inflation restart going
up, which is also possible, we will intervene with different
means including higher interest rates."
He predicted the inflation rate would be at 5.6-5.7 percent
by the end of 2013, and around 4 percent by the end of 2014.
The government said this month that it expects the economy
to grow 4.0 percent next year after an expected 3.6 percent
expansion this year.
Ayari predicted on Sunday that gross domestic product would
expand between 3.0 and 3.6 percent in 2013.