The Tunisian Economic Observatory (OTE) has called for a review of the role of the Central Bank of Tunisia (BCT) so that it can effectively fulfil its mission in the implementation of public policies, especially since the dissociation between monetary policy and financial and economic policy due to the independence of the bank has hindered the implementation of effective and efficient public policies to achieve economic development.
In an economic report published Wednesday, the OTE pointed out that since the entry into force of the 2016 law establishing the statutes of the BCT, this state of affairs has not had a positive impact on the inflation rate in Tunisia, despite the fact that the task of stabilising prices is considered to be the main role of the bank.
In its report entitled “Who determines monetary policy in Tunisia? “the BCT emphasized the need to rethink the role of the BCT in line with the needs of the economic situation, in particular to encourage investment and wealth creation, and to break with the International Monetary Fund’s (IMF) approach, which limits the BCT’s mission to fighting inflation.
OTE also referred to the current controversy surrounding the law on the independence of the BCT and the concerns of certain foreign parties on this issue, which could jeopardise the rescue strategy agreed between Tunisia and the IMF.
It pointed to recent contradictory statements by Tunisian government officials on the role of the bank. The deputy speaker of parliament, Riadh Jïdane, claimed that there were real limits to the bank’s independence, while the minister of the economy and planning, Samir Saïed, stressed that the government had no intention of changing the bank’s status or limiting its independence.
The OTE also argued that the increase in public debt, the decline in the BCT’s foreign exchange reserves and the continued rise in the inflation rate had led to a debate on the bank’s role in development.
It pointed out that the bank’s fate linked to the IMF’s conditions is not unprecedented, as the Fund’s pressure has increased over time, since the IMF’s obligations do not only include the reactivation of the law on the bank’s independence.
It recalled that since 2013, the Fund has obliged the executive to devalue the dinar on several occasions and to take other monetary and financial measures.
The IMF has been pressuring the Tunisian government to revise the exchange rate law since the start of negotiations on a $1.9 billion loan agreement, as it is a procedure that precedes the signing of the agreement and the liberalisation of the exchange rate.
It should be noted that the governor of the BCT, Marouen Abbassi, had previously stated that this law would allow for a “gradual” and “complete” liberalisation of the Tunisian dinar.
Source: Agence Tunis Afrique Presse