In the medium run we would face the negative effects of the depreciation of the dinar manifesting as: a more durable inflation growth; a fall in business, investment and consumer confidence; an increase in euro loan repayment instalments for households and businesses; in a nutshell, in the medium term the effects would be measured by the weakening of all key economic indicators in the country – which we had an opportunity to see in several instances before 2012.
It is a fact that several episodes of considerable weakening of the dinar from 2000 to 2012 didn’t help economic growth, while it did have negative implications for business and investment confidence, inflation, inflation expectations, the financial sector and overall economic activity.