The dinar float and the inflation spike that followed

Starting in 2016, under the IMF-backed program, the Banque Centrale de Tunisie progressively dismantled the de facto exchange-rate anchor it had used for decades, allowing the dinar to depreciate rather than burning reserves to defend it. The currency fell roughly 37% against the euro between January 2016 and June 2018, and about 54% cumulatively across 2016-2018, as the central bank also let broad money grow by around 23% over the period. The combination fed directly into inflation, which climbed toward double digits by 2018, forcing the central bank into a subsequent tightening cycle to regain control. The depreciation also raised the local-currency cost of Tunisia's dollar- and euro-denominated public debt: total debt rose by roughly 18.7 billion dinars between 2016 and 2018 alone, pushing the debt-to-GDP ratio from about 55% to roughly 78% over just two years. The episode illustrates a recurring pattern in Tunisia's post-2011 charts: each step toward a more market-determined exchange rate bought external-sector credibility at the cost of a sharper, more visible inflation and debt spike in the short run.