Tunisia president fires central bank governor

[June 28, 2012]  TUNIS, Tunisia (AP) -- Tunisia's president fired the governor of the central bank because his monetary policies conflicted with the economic program of the government, the president's office said Wednesday.

Governor Mustapha Kamel Nabli, a World Bank economist, had led the central bank since the overthrow of the dictatorship in January 2011 and was known to pursue a very independent policy from the government.

"There was a conviction that the measures adopted by the Central Bank of Tunisia on one hand, and those by the (government), on the other were not in harmony, particularly amid the difficulties the country was experiencing," said presidential spokesman Adnan Mancer.

The decision will now be submitted to the constituent assembly, Tunisia's elected legislature, for approval within the next 15 days.

Nabli presided over a period of economic shock including 1.8 percent negative growth rate last year. The economy has been reeling since tourists deserted this once popular destination following the dictator's ouster and strikes have crippled the mining sector.

In recent months, however, there have been nascent signs of a recovery.

"I think everyone agrees he was a very good economist. Was he a good central banker? Many people disagree on that, and I am one of those," said Ezzedine Saidane, a financial consultant. "The way he managed the situation of the economy for the last 15 months was in my opinion really terrible."

He criticized Nabli for cutting interest rates, keeping the currency artificially high and not doing enough to succor the ailing banking sector.

Economist Mahmoud Ben Romdhane, however, maintained that Nabli's strict monetary policy was what the country needed and his dismissal sent bad signals to foreign donors and investors.

"I think it will tarnish the government's image worldwide because Nabli is known as a prominent expert, not only in Tunisia but worldwide and people would not understand the exact rationale," he said.

The firing of Nabli also comes during a period political uncertainty in the country after the president and the prime minister publicly disagreed over the decision to extradite Libya's former Prime Minister Al-Baghdadi Al-Mahmoudi, raising the specter of a schism in the ruling coalition.

[Associated Press; By PAUL SCHEMM and BOUAZZA BEN BOUAZZA]

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