The currency has experienced a decline in value against both the dollar and euro, which began earlier this year following the outbreak of small street protests. By the end of last week, the dinar was 10.9 percent lower at 2.7555 per US dollar and 8.5 percent lower at 3.2248 against the euro in the year-to-date.
“Overall, we expect that the dinar will continue to fall steadily over the coming months and find a floor at 3.40/€ by the end of 2019. This will keep inflation elevated and weigh on consumer spending,” Capital Economics said in a research note sent to the media on Thursday.
“The dinar is down by 8 percent against the euro since the central bank loosened its grip on the currency in May and is now at our year-end forecast of 3.20/€,” the note added.
Since May, the Tunisian Central Bank has permitted a slide of the dinar against both the euro and the dollar, to end the bank’s interventions to support the currency. In the same month, it raised the key interest rate by 100 basis points, the second increase in three months, to help ease soaring inflation.
But zawya.com/mena describes how the ensuing political turmoil had a negative impact on the economy and a $2.8 billion loan-aid package was subsequently agreed with the International Monetary Fund.
The IMF concluded a visit to Tunisia on Friday to discuss the extension of a $250 million loan from the IMF to Tunisia as part of the package, as well as discussing ways of cutting its energy bills.
