TUNIS - Tunisia's central bank on Wednesday raised its key interest rate by 25 bps to 7.25% to combat inflation, the bank said, the second hike in five months.
The central bank also decided to raise the interest rate on savings by 25 basis points to 6.25%.
Inflation in the North African country rose to a record 9.1% in September, from 8.6% in August.
The last rate increase was 75 basis points in May.
Tunisia, which is struggling to tackle badly hit public finances, is seeking a loan from the International Monetary Fund in exchange for unpopular reforms, including spending cuts, and cutting energy and food subsidies.
The IMF proposals have led the country's powerful UGTT labor union to warn the government it will lead street protests over any "painful" changes. It has opposed big state spending cuts in recent years, arguing the government should instead tackle corruption and tax evasion.
The IMF continued to call for further monetary tightening by Tunisia to tackle the North African country’s record levels of inflation.
The bank said in statement that exchange reserves reached 23.848 billion dinars ($7.34 billion), equivalent to 112 days of imports on Sept .28, compared to 23.313 billion dinars or 133 days of imports at the end of 2021.
The current account deficit reached -10.1% of GDP during the first eight months of 2022, compared to -6.6% in 2021, due to the worsening of the trade deficit, the bank said.
It expected that inflationary pressures will continue, driven by internal and external factors in the coming period of this year.
($1 = 3.2481 Tunisian dinars)
(Reporting by Tarek Amara, editing by William Maclean, Mark Heinrich and Aurora Ellis)