In its latest note on short-term economic and monetary outlook, the Central Bank of Tunisia found that the country's foreign exchange reserves stood at $6.955 billion at the end of 2019, equivalent to 111 days of imports. This is the highest level in value over the past five years. In 2018, the amount was $4.667 billion (84 days of imports).

This increase in forex reserves is linked to the improvement in income and service balances, which substantially reduced the impact of the widening trade deficit on the current account balance.

The current account balance stood at -TND10 billion (about -$3.5 billion) or -8.8% of GDP, after reaching an historical record of -11.7 billion dinars (about -$4 billion) or -11.1% of GDP in 2018. Excluding energy, the current balance performed better compared to previous years with only -2% of GDP, against an average of -5.3% for the period 2011-2018.

In addition to the improvement in the services balance, this development was also favored by the outcomes of the restrictive monetary policy, the Central Bank said. Another factor is the exchange rate with an appreciation of the dinar against the major currencies which, started in April 2019, continued at the beginning of the year 2020.

In addition, the inflation rate declined to 6.1% at the end of December 2019, against 7.1% a year earlier. The Central Bank forecasts an average annual level of 5.3% for 2020 and 2021.