Tunisia

Tunisia initially relied on heavy management of its exchange rate and credit controls, but from the mid-1980s pursued a process of very gradual but wide-ranging financial liberalisation; the adoption of inflation targets, talked about from the mid-2000s, has so far not been realised, partly at least because of the political upheavals from 2011.

Years Targets and attainment Classification
1974-2017 exchange rate initially adjusted daily with reference to FRF and DM, then with reference to basket that was widened and revised successively in 1978, 1981 and 1984, and adjusted more flexibly from 1986 with view to stabilising real effective rate; monetary policy in early years focused on stimulating savings growth and regulating credit allocation by sector, with growing emphasis on price and financial stability; monetary policy initially relies on prior approval of bank loans, rediscount ceilings, and liquidity and reserve ratios, plus global development finance ratio for banks; heavily regulated interbank market used by central bank to support bank liquidity; very gradual financial liberalisation in mid-1980s with more use of interest rates; deeper liberalisation from 1987 covering banking system, interest rates and money market, in which auction and repurchase facilities become main means of central bank intervention, also introduction of certificates of deposit and Treasury bills, later Treasury bonds; interbank forex market from 1994, with strong initial central bank presence gradually reduced, alongside gradual increases in exchange rate flexibility from 2000 and in capital account liberalisation; 2005 monetary policy shifts from focus on credit growth to M3/reserve money targeting (but targets poorly attained), with preparation for eventual inflation targeting (dependent on further development of money market), together with full capital account liberalisation and exchange rate flexibility; 2006 central bank independence strengthened; by 2010 policy rate within corridor of central bank deposit and lending rates but money market rate until 2015 mostly near top of corridor due to inefficient liquidity management; no obvious big changes to monetary framework or operations resulting from political revolution in early 2011 and subsequent upheavals, but major reforms delayed; monetary policy committee set up 2013; some evidence of unannounced exchange rate crawl from 2013, punctuated by periodic sharp adjustments loosely structured discretion LSD

Selected IMF references: RED 1973 Appendix C; RED 1975 pp47-50, 72; SR 1975 pp7-8; RED 1979 p59; RED 1982 p55; RED 1985 pp29-31, 48; RED 1987 pp43-6, 67; Tunisia: Recent Experience in Structural Adjustment (1990), pp3-11; Tunisia: A Review of Adjustment Experience  (1993), pp20-4, 27-8; SR 1994 pp12-13, 15, 23; RED 1996 pp41-3, 55; SI 1997 pp46-7, 49-51; RED 1999 pp27-9, 30-2; SR 1999 pp14-15, 47; SI 2002 pp9-12, 20; SR 2002 pp19-22; SR 2003 pp12-15 and Supplement 1, pp4-7; SR 2004 pp10-11, 19-20; SR 2006 pp15-16; SR 2007 pp11-12; SR 2008 pp9-10, 14; SR 2012 pp13-14; SR 2013 pp7-8, 12-14; SR 2014 pp11-14; SR 2015 pp19-21; SR 2017 pp4, 12-14,49-51; SR 2018 pp44-9.

Additional reference: Boughzala and Moussa (2011).

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