Tunisia-Samir Rakiq discloses repercussions of state’s borrowing from Central Bank (Video)

Speaking to Tunisie Numérique, analyst and financial expert Samir Rakiq remarked today, Wednesday, that the state’s decision to borrow from the Central Bank, approved yesterday by the parliament will have noteworthy consequences.

Rakiq reasoned that the state’s injection of dinars into the market should be reimbursed by the generation of production, investment, and wealth. Nevertheless, if money is introduced into the market without corresponding production, this will direct to a situation where currency circulates freely at the personal level, potentially generating financial inflation, price increases, and higher interest rates for loans.

In this context, he stressed that the state could have adopted different other measures to stimulate the economy and encourage investment and savings. This is especially important given the country’s current challenging situation, which has resulted from a decade of no wealth creation or development—basically, ten years of stagnation and negative growth rates.

He also stated that, as an analyst and financial expert, he advocates for the Tunisian state to foster investment and wealth creation by executing several strategies. One such strategy is for the state to ensure certain surpluses on loans that banks offer to investors and companies. This approach seeks to support productive investment by covering interest rates surpassing 8%, namely, by paying 3 or 4 percentage points above this rate, as negotiated with private banks.

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