Tunisia's foreign currency reserves fall to 15-year low

Tunisia's foreign currency reserves fall to 15-year low
By Tarek Amara

TUNIS (Reuters) - A worsening trade deficit has further eroded Tunisia’s foreign currency reserves, which are now worth just 89 days of imports, the lowest level in 15 years, central bank figures showed on Wednesday.

Tunisia’s trade deficit widened in December 2017 to a record $6.25 billion.

The central bank said on its website that foreign currency reserves had fallen to 12.306 billion Tunisian dinars by Jan. 23, enough to cover 89 days of imports, compared with 106 days in the same period a year earlier.

The country has been praised as the only democratic success among the nations where “Arab Spring” revolts took place in 2011. But successive governments have failed to trim deficits and create growth.

Protests against tax and price increases erupted this month and social tensions over the economy are still simmering.

‮"‬This level of foreign currency is very critical," local financial expert Ezzidine Saidaan said, adding it put at risk Tunisia's imports of food, energy and medicines, and its ability to service its debt, a negative sign as it prepares to issue bonds this year.

Tunisia's parliament on Tuesday approved a plan by the central bank to sell bonds worth $1 billion in the second half of March to help finance the 2018 budget.

Tunisia forecasts the budget deficit to fall to 4.9 percent of gross domestic product in 2018, from about 6 percent expected in 2017. It aims to raise GDP growth to about 3 percent next year from 2.3 percent this year.

The dinar has fallen to a record low versus the euro, trading at 3.011 this month.

(Reporting by Tarek Amara; Editing by Robin Pomeroy)

2018-01-24 11:39:42

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