Tunisian central bank sees inflation below 7 pct after rate rise
* Inflation has come down from 7.8 pct last June
* Central bank has raised rates aggressively
* Central bank chief says govt also needs to help curb
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By Tarek Amara
TUNIS, Feb 20 (Reuters) - Tunisia's central bank chief said
he expects inflation to fall below 7 percent following Tuesday's
interest rate rise but the government also needs to do more to
"After our decision to raise the interest rate we expect the
annual inflation to fall to less than 7 percent, precisely to
6.8 or 6.9 percent," central bank Governor Marouane Abbassi told
reporters on Wednesday. Inflation stood at 7.1 percent in
The bank raised its key interest rate to 7.75 percent on
Tuesday, from 6.75 percent, to curb inflation, the third such
hike in the past 12 months. It last raised the rate by 100 basis
points in May.
"Raising interest rates is very important but not enough to
curb inflation," he said. "It should be accompanied by other
measures by the government including fighting cross-smuggling
and monopolies in local trade."
Tunisia's inflation rate has come down from 7.5 percent in
December and had reached 7.8 percent last June, the highest
The dinar has slumped as a worsening trade deficit has
eroded Tunisia’s foreign currency reserves, which now cover only
about 85 days’ worth of imports.
The International Monetary Fund called last October for
further monetary tightening by Tunisia to tackle rising prices.
(Reporting by Tarek Amara
Editing by David Holmes and Susan Fenton)
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