The governor of the Central Bank of Tunisia (BCT), Marouane Abassi, said on Tuesday that the Russian military intervention in Ukraine had no repercussions on the exchange rate in the country for the moment.
Abassi was speaking at a press conference held by the BCT regarding the transfer of the Banque Franco-Tunisienne (BFT) liquidation file to justice on Monday.
“For the moment there is no impact on the exchange rate since our current currency reserves stand at more than 130 days of import”, declared the Governor of the BCT.
Abassi said that the repercussions of the war in Ukraine “are mainly related to oil prices, which have skyrocketed, as well as wheat prices (staple food), especially as we import our grain needs from Russia and of Ukraine”.
“We should put in place a short-term strategy to deal with this situation,” he added.
Regarding the transfer of the Banque Franco-Tunisienne file to the courts to render a judgment of dissolution and liquidation, Abassi declared that “this decision will have no impact on the Tunisian banking and financial sector”.
He explained that “this decision was taken at the right time, and the liquidation of the BFT will have no consequences on the banking system in Tunisia, given that the outstanding balance of the bank’s deposits does not exceed 0.02 % of total deposits of all banks”.
The Governor of the BCT considers that the decision relating to the liquidation of Banque Franco-Tunisienne is “a positive point for us vis-à-vis rating agencies and international financial institutions because it will strengthen the image of the sector Tunisian bank abroad”.
The Banque Franco-Tunisienne was created in 1879, with a capital of 5 million dinars (1.7 million dollars). It has 5 branches and has approximately 67 employees still in office.
The outstanding balance of the bank’s deposits amounts to 20 million dinars (6.9 million dollars), i.e. 0.02% of the total deposits of all the banks, while the volume of commitments (debts) of the bank is estimated at 279 million dinars (96.2 million dollars).
The Governor of the BCT referred to the history of the BFT case, particularly with regard to the legal battle that broke out between the Tunisian State and the investment group Arab Business Consortium International (ABCI) in 1982 and which continues until now.
This file was submitted to the International Center for Settlement of Investment Disputes (ICSID), part of the World Bank Group. It was the subject of several attempts at an amicable settlement, all of which failed, which negatively impacted the financial performance of BFT for more than four decades.
Abassi recalled that the Tunisian authorities had tried in 2007 and 2010 to turn around the Banque Franco-Tunisienne, but this attempt did not succeed because of the high cost of the turnaround.
The BFT file was transferred to the Commission for the Resolution of Banks and Financial Institutions in a Compromised Situation, – created under Law No. 2016-48 relating to Banks and Financial Institutions -, and a negotiator was appointed to save the banking establishment, but the financial difficulties of the bank got the better of this rescue operation, he concluded.
