The Central Bank of Tunisia Cuts Interest Rate by 0.5% to 7.5%
The Central Bank of Tunisia announced on Wednesday evening a 50 basis point cut to its key interest rate, bringing it down to 7.5%. This move aims to stimulate investment and boost economic growth, marking the first rate cut in five years.
In its official statement, the central bank also confirmed a reduction in the savings interest rate to 6.5%.
Policy Easing Amid Political Pressure
The decision comes amid mounting pressure from President Kais Saied, who has repeatedly called for a more accommodative monetary policy. Last month, he urged Central Bank Governor Fethi Nouri to address widespread complaints about high interest rates.
This is the first interest rate cut since September 2020, when the central bank reduced borrowing costs by 50 basis points, following a 100 basis point cut in March 2020 in response to the COVID-19 pandemic.
Declining Inflation Supports Rate Cut
Tunisia's inflation rate fell to 5.7% in February, down from 6% in January and 6.2% in December, reaching its lowest level since 2021. This downward trend in inflation likely played a key role in the central bank's decision to ease monetary policy.
By lowering interest rates, the Central Bank of Tunisia seeks to stimulate economic activity, encourage investment, and ease borrowing costs. With inflation showing signs of moderation, this move reflects the bank’s efforts to balance growth objectives with financial stability.
