Tunisia's central bank cuts banks reserve requirement

Reuters , Thursday 26 May 2011

Bank reserve requirement cut from 5 per cent to 2 per cent to boost the economy

Mustapha Kamel Nabli (Photo: AP)
Tunisia's Central Bank Governor Mustapha Kamel Nabli (Photo: AP)

Tunisia's central bank said on Thursday it had cut bank reserve requirements to 2 per cent from 5 per cent as it seeks to boost an economy that has been struggling since the president was overthrown in January.

Street protests, strikes and violence since the ouster of President Zine al-Abidine Ben Ali have hit the tourism sector, one of Tunisia's biggest sources of revenue, and also disrupted other service industries and manufacturing.

The bank kept its key interest rate unchanged. It said signs of economic recovery have started to appear since last month but the upturn was not happening fast enough.

The bank said the level of foreign exchange reserves continued to decline, reaching 10.3 billion Tunisian dinars ($7.38 billion), equivalent to 115 days worth of imports, by May 20, against 13 billion dinars, or 147 days worth of imports, at the end of 2010.

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