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Tunisia central bank cuts interest rate to spur growth Bank drops rate to 4 per cent in effort to boost an economy still reeling from the aftermath of January's revolt
Tunisia's central bank cut its key interest rate by 50 basis points to 4 per cent on Thursday, as it seeks to boost an economy still reeling from the aftermath of a revolt that toppled its president earlier this year. "The decision was made to support the signs of gradual improvement in the economic situation and to provide adequate funding to support economic institutions in order to remedy the decline in the growth rate," the bank said in a statement. The bank last changed its key interest rate in February 2010, when it cut the rate by 75 basis points to 4.5 per cent. An uprising in January forced veteran leader Zine al-Abidine Ben Ali to leave the country, and inspired the "Arab Spring" revolts sweeping the Middle East. However, the violence and strikes that followed the revolution forced some businesses to suspend operations and also scared off foreign tourists, on whom Tunisia relies for a large part of its revenues. Tunisian officials expect 1 per cent gross domestic product growth this year, down from about 3.7 per cent in 2010. Finance Minister Jalloul Ayed told Reuters this month he expected growth to rebound next year to over 5 per cent.
