Infl ation targeting and fi nancial fragility in Tunisia

Starting in the mid 1980s and following a period of acute balance of payments and internal imbalances, Tunisia has managed to achieve macroeconomic stability and to bring infl ation down from over 10 per cent in 1984 to less than 3 per cent in 2005 thanks to the implementation of important trade, fi nancial and monetary reforms. Recently, the government of Tunisia announced that it is preparing to adopt a monetary policy of infl ation targeting (IT), after an indeterminate transition period, and to move to full liberalisation of capital mobility and full convertibility of the Tunisian Dinar (TND).