Historical Sketch

In the late 7th century, Islam arrived at the North-West coast of Africa, and in 1574 the city of Tunis was conquered by the Ottoman Empire. The local rulers were gaining more independence since the mid-17th century, and in 1705, the Husain family obtained the hereditary title of Bey of Tunis. In 1861, Tunis broke away from the Ottoman Empire by proclaiming a constitutional monarchy. Due to the disastrous economic situation, Tunisia had to first cede financial administration to French-British "International Financial Commission" in 1869, then to a French protectorate in 1881. The Bey nominally remained on the throne. During World War II, Tunisia was initially under control of the Vichy government of France but got conquered by Allied forces in 1943. After the war, the mostly non-violent struggle for freedom began which led to independence of the Kingdom of Tunisia in March 1956. In the following year, the king was deposed, and Tunisia became a republic.

Monetary History Overview

During the 17th century, the coinage of Tunis had deteriorated to the point that only debased subsidiary coins were produced locally, like it had been the case throughout the Ottoman Empire. The Spanish Dollar had entered the market though foreign trade and dominated the transactions, locally it was referred to as "Sebili", after the city of Seville. In September 1847, a comprehensive coinage reform was carried out in Tunis. The Tunisian Piastre was initially a silver currency, but in October 1855, gold coins were made current, as well. The gold-to-silver ratio was, however, too high and had to be revised already ten months later. The fourth revision of 1872 finally aligned the Piastre with the French bimetallic standard. The government attempted to introduce paper money already with the 1847 reform, but due to lack of acceptance this was given up again in 1853. After France had established a protectorate over Tunisia in 1881, monetary integration proved straight-forward as the Piastre and the French Franc had already a fixed ratio since the 1872 reform. In 1891, the Piastre was abolished in favour of the Tunisian Franc, on par with the French currency. Paper money was introduced in 1904, when the colonial bank of neighbouring Algeria was granted the issuing privilege also for Tunisia. Only in 1949, the bank name was adapted to Bank of Algeria and Tunisia. After independence in 1956, the Tunisian Franc was kept for a transition period, and also followed the French devaluation of July 1958. Beginning November of the same year, the currency was reformed. Three zeros were cut, and the Tunisian Dinar became the national currency. It repegged to the US Dollar. In 1964, a 20% devaluation was done, afterwards the Dinar remained mostly unchanged, even after the nominal floating of the exchange rate in March 1974. But in the early 1980, the Dinar began to depreciate, totalling 50%, and continued to lose value steadily afterwards. In the mid-2010s, depreciation accelerated to reach close to 50% within a couple of years. Only at the end of the decade, the Dinar went back to stable again.

Tunisia joined the International Monetary Fund (IMF) on 14.04.1958.

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