Tunisia's central bank hikes benchmark interest rate to 4.5 pct

 The central bank had kept its main rate on hold since March, when it raised it by 25 basis points to 4 percent to fight rising inflation.

The bank underlined the growing need for liquidity in the market by cutting its required reserve ratio to a low 1 percent from 2 percent.

"The current level of prices is one of the main causes of tensions over the financial balances, and some indicators signal further inflationary pressures in the coming months," the bank said in a statement.

It said that while inflation was flat for the last three months at 5.8 percent from a year earlier, the average of the inflation index in the last 11 months was 6.1 percent, up from 5.5 percent for the same period in 2012.

The bank added that it was concerned about pressures on the balance of payments in the North African country, where the trade deficit widened to 7.1 percent of gross domestic product in the first 11 months of the year.

Foreign currency reserves totaled 11.737 billion dinars by December 24, equivalent to 108 days of imports and up from 11.324 billion dinars last September, it said.

Last month, the central bank said a standoff between the Islamist-led government and secular opposition was threatening economic growth. The two sides have now agreed to hand over power to a caretaker government by January14, the third anniversary of the fall of autocratic leader Zine el-Abidine Ben Ali, and organise elections during the first half of 2014.

The government is struggling to convince international lenders to provide it with loans.

The IMF has yet to grant it $500 million in the second tranche of a $1.7 billion loan agreement with the government. That tranche was expected to be disbursed by the end of the year. A source close to the World Bank told Reuters earlier this month the bank would suspend loans for projects that need the approval of Tunisia's National Assembly, including budget support, until the end of the political deadlock.