banking

BCT raises key rate by 0.75 point and interest rate on savings by 1 point

May 19, 2022

The Executive Board of Tunisia (BCT) decided at its meeting Tuesday to raise the key rate of the bank by 0.75 percentage point to 7%. In parallel, it decided to raise the rate of remuneration of savings by 1 percentage point to 6%.

The decision to increase the key rate of the BCT was predictable given that inflation reached at the end of last April its highest level since December 2018 to stand at 7.5%.

Moreover, anticipating this increase in the key rate, the banks refused, on May 5, 2022, an exchange auction and refrained from submitting exchange offers.

Convinced of an imminent rise in interest rates, banks preferred to postpone their investments in T-Bills after a long-awaited decision by the BCT to raise its key rate, especially since part of this increase will be directly transmitted on the long rates.

In parallel with the increase in the key rate, the Executive Board of the BCT decided to raise the rate of remuneration of savings by 100 basis points to bring it to 6%.

The rate of remuneration of savings (TRE) has been frozen at its current level of 5% since January 2018.

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