We expect Banque centrale de Tunisie (BCT, the central bank) to implement measures to ensure sufficient liquidity in the banking system, but it will also keep a close eye on inflation, which is forecast to increase on the back of higher commodity prices as well as an increase in government spending. The central bank cut the reserve requirement in May from 4.5% to 2% to encourage lending to businesses. From 2012 onwards, it will maintain a relatively tight monetary policy, with the aim of ensuring that expansion in broad money (M2) stays manageable and inflation remains largely under control. Most major economies, including the eurozone, have already started to tighten monetary policies as part of a policy normalisation process that needs to happen for the private sector to recover. In the short term, the central bank will focus on maintaining liquidity to support bank lending, in light of the continuing unrest in the domestic market as well as in Libya (which will affect inward remittances). The BCT decided to leave its key interest rate unchanged at its most recent meeting.