Comments on: Tunisian Dinar Devalued Amidst Persistent Economic Turbulence

By: Arnouba

Arnouba — Thu, 19 Jan 2012 17:16:28 +0000

Chedli, right now the economic instability in Tunisia is not reflected in the EURTND quote. As TL points out, it’s not a freely traded currency so it only reflects what the monetary authorities think it should reflect (rightly so or not…). There’s no offshore market for the TND, so no selling pressure. The economic woes get reflected in the black market rates, as defined among other people by the hawwata off the coast of Mehdia

By: Arnouba

Arnouba — Thu, 19 Jan 2012 17:10:07 +0000

I think the BCT has always tried to keep the Tunisian Dinar in a managed devaluation (of the order of 2-5% per year vs. EUR) and not more for fear of inflationary pressures (which have always felt underreported…).

By: TL

TL — Tue, 17 Jan 2012 13:40:33 +0000

Our currency is pegged to a basket of currencies. The recent decrease of the value of the TD is mainly due to the Euro’s decrease. Now, since the dinar is not allowed to be freely exchanged the impact of the current instability in Tunisia,if any, can not be quantified. A weak dinar is what we need at the moment otherwise our export activities will come to a halt. A weaker dinar means a huge competitive advantage for exporters who are obviously competing with low cost Asian countries such as China. We need to make sure this is maintained at least for 3 years to allow a robust export and tourism activities. On the other hand a weak dinar will cause a decrease in productivity and efficiency for manufactures and other businesses that do not get paid with foreign currency simply because the replacement cost is high! Overall a weak dinar is good for Tunisia.

By: Chedley Aouriri

Chedley Aouriri — Tue, 17 Jan 2012 10:31:23 +0000

The weakness of the Dinar vs USD is due to a combination of factors: weakness of the Euro, and economic instability in Tunisia.

By: Motazz Beloua

Motazz Beloua — Tue, 17 Jan 2012 02:24:17 +0000

The drop of Tunisian Dinar value is not necessarly a weakness if we were a country of exportation,then it would offer more competitivity (as China with its low Yuan) but we’re not,unfortunatly. Still,it is not a fatality neither a critical situation as the US does this on purpose, several times since 2008 (us$ devaluation) to increase selling of goods and services, a thing that both professors at HEC forgot to say ( or u forgot to write)

By: Arnouba

Arnouba — Mon, 16 Jan 2012 20:27:32 +0000

The Tunisian Dinar is kept in a narrow range with the main trading partners currency, i.e. the Euro. Any weakness with regards to the USD is a reflection of the recent “evolution” of the EUR, and is not a reflection of the current state of affairs in Tunisia. (I’m not saying that it couldn’t, it’s just that right now, that’s not the case…)