Tunisia central bank raises key rate by 75 bps to curb inflation

TUNIS (Reuters) - Tunisia's central bank on Friday raised its key interest rate by 75 basis points to 8% from 7.25% to combat high inflation, the bank said, marking the third hike this year.

Tunisia's inflation rate jumped to a record 9.8% in November from 9.2% in October.

"Through this action, the Central Bank aims to help curb the upward trend in inflation," the bank said in a statement.

The last interest rate hike was in October when the central bank raised it by 25 basis points to 7.25%.

The bank also decided on Friday to raise the minimum interest rate on savings to 7.0%.

The current deficit widened to -7.8% of GDP at the end of November 2022, against -5.3% in the same period last year.

The bank said it is deeply concerned by the risks surrounding Tunisia's monetary and financial balances, and underlines the need to guarantee external financing.

The trade deficit is expected to be more than 25 billion dinars ($7.99 billion) for the whole of 2022, a record level that compares with 16.2 billion in 2021.

($1 = 3.1275 Tunisian dinars)

(Reporting by Tarek Amara; Editing by Andrew Heavens, Jon Boyle and Barbara Lewis)

By Tarek Amara