TUNIS, April 29 (Xinhua) -- Tunisian financial policy has met crisis in the first quarter of 2017 with a depreciation of the Tunisian dinar, which stirs fears of threatening the country's economy.
According to the latest prices decided by the Central Bank of Tunisia (BCT), Tunisia's dinar traded at 2.41 against the U.S. dollar and 2.62 against euro.
The BCT decided last Tuesday to increase its key interest rate by 50 points to 4.75 percent and raise the minimum rate of savings by 50 points to 4 percent.
"Recent developments in the foreign exchange market saw, since last week, an increase in pressures in relation to a rising demand from operators on foreign currencies generating a significant depreciation of the dinar," a source from the BCT said.
Chakib Hammi, deputy director at a branch of Habitat Bank in Tunis, believes that this depreciation could result in a shortfall in credits and the threat of depletion of funds.
Moreover, the banker warned the repercussions of this serious depreciation on the Tunisian national economy in the light of potential threats that it could trigger.
"In principle, all sectors will be affected starting with the local financial market to agriculture, passing through the banking system, stock exchange, industry and even vital sectors such as textiles," he concluded.
The BCT Governor Chedly Ayari recently announced some measures trying to redress the situation and support the dinar, including issuing 100 million dollars into the local market.
Dominant unions of workers and employers in Tunisia also expressed fear of currency depreciation.
For the Tunisian Union of Labor (UGTT), the shock wave can be minimized by limiting the acquisition of imported products, preserving national enterprises and employability, as well as contribution of the Tunisians living abroad.
The Tunisian Finance Minister Lamia Zribi also claimed in a statement a "descent into hell" of the value of its national currency against the major foreign currencies.
The minister has attributed the collapse of the dinar partly to the aggravation of the trade deficit by more than 50 percent year on year.
On the side of the Tunisian Union of Industry, Commerce and Handicraft (UTICA), the decline of the dinar constitutes a "real danger" for the Tunisian economy.
It will also have negative impacts on the investment, firms' competitive capacity, inflation, trade deficit, debt servicing and the compensation fund.
According to the latest economic figures of the BCT until March 2017, the trade deficit exceeded 2,500 million dinars (over 1 billion dollars) against 1,350 million dinars (548 million dollars) year on year.
As for the Tunisian state's budget, the deficit widened to 5,452 million dinars (over 2 billion dollars), equivalent to 6 percent of Gross Domestic Product.