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Tunisian Central Bank raises interest rate to 8%. Here’s why

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As part of moves to combat the country’s inflation rate, Tunisia’s central bank on Friday raised its key interest rate by 75 basis points to 8% from 7.25%.

The bank said in a statement, “through this action, the Central Bank aims to help curb the upward trend in inflation.”

It is the third the apex bank has hiked interest this year. The last interest rate hike was in October when the central bank raised it by 25 basis points.

The bank also decided to raise the minimum interest rate on savings to 7.0% as it expects inflation to average 10.5% in 2023, up from the 8.3% expected this year.

The Tunisian government, had, in the bid to secure the deal in September announced plans to remove subsidies on fuel products, which is one of the preconditions given to it by the IMF before the release of the fund.

Last week, the country announced that as part of the preconditions for an International Monetary Fund rescue package, Tunisia expects to reduce its fiscal deficit to 5.5% next year from a forecast 7.7% this year.

Although it has sealed a deal with the International Monetary Fund on a loan of between $2 billion and $4 billion over three years. The IMF also called for further monetary tightening to tackle inflation.

The North African country under the current president,  Kais Saiedis facing its worst political crisis since the 2011 revolution that swept through the Arab region.

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Progress as Kenya’s January 2023 inflation rate slows to 9.0%

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The Kenyan statistics office has revealed that the country’s inflation rate slowed to 9.0% year-on-year in January from 9.1% a month earlier.

The latest inflation figure makes it the third straight month that inflation has fallen in the East African country. The figure hit 9.6% in October, its highest level since May 2017. January’s inflation is still above the government’s preferred band of 2.5%-7.5%.

The statement by the Kenya National Bureau of Statistics shows that on a monthly basis, inflation was 0.2% compared with 0.5% in December.

Inflation inched down to 9.1% in December, the second straight month of decrease, but still above the government’s preferred band of 2.5-7.5%.

Kenya’s central bank on Monday announced a new monetary policy holding its benchmark lending rate steady at 8.75%.

According to African Development Bank, Kenyan economic growth is projected to decelerate to 5.9% in 2022 and 5.7% in 2023, driven on the demand side by a decline in domestic and external demand caused by lower income and by an increase in food and fuel import costs and on the supply side by tepid economic activity across sectors due to cost-push factors.

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Nigeria’s legislature approves extra $2.2 bln central bank loans to government

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Nigeria’s debt crisis isn’t going away anytime soon as the country’s lower house of parliament has approved President Muhammadu Buhari’s request to borrow an extra $2.2 billion.

According to the lawmakers, the approval is in temporary advance from the country’s central bank.

Nigeria’s minister of Finance in December made the revelation that the country will henceforth focus on concessionary loans from the World Bank, Islamic Development Bank, African Development Bank, and others for external loans, Ahmed told Reuters in Abuja after a cabinet meeting.

The legislators plan to discuss with officials in order to turn central bank loans to the government worth 23.7 trillion naira ($52 billion) into long-term debt.

President Buhari asked parliament in December for approval to convert central bank’s temporary advance to government into 40-year bonds at 9% interest to cut interest payments but lawmakers questioned the plan.

Government debt in Nigeria averaged 73641.06 USD Million from 2012 until 2022, reaching an all-time high of 103312.80 USD Million in the second quarter of 2022 and a record low of 48361.37 USD Million in the first quarter of 2013.

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