Asharq Al-awsat English Middle-east and International News and Opinion from Asharq Al-awsat Newspaper

Tunisian Foreign Currency Reserves Drop to 15-Year-Low

Tunisian Foreign Currency Reserves Drop to 15-Year-Low

Thursday, 25 January, 2018 - 14:00
A shopkeeper counts money in of his shop at a bazar in Tunis, Tunisia August 10, 2016. REUTERS/Zoubeir Souissi

The Central Bank of Tunisia has stated that Tunisia’s foreign exchange reserves in January reached TND 12.3 billion, its lowest rate in 15 years. Tunisia closed the year 2017 with a record trade deficit, on the order of 15.5 billion dinars.

Tunisia is facing pressures by international mandates to impose austerity procedures to limit the aggravation of the financial condition. Meanwhile, the country is witnessing protests against the high cost of living, and these protests bring to mind the revolution that toppled former president Zine El Abidine Ben Ali.

State budget of 2018 increased taxes on cars, alcoholic drinks, phone calls, internet and hotel prices, along with others. The budget also included raising customs fees of some imported products such as cosmetics and some agricultural products in order to reduce the trade deficit.

Tunisia has suspended the free-trade exchange agreement with Turkey for five years, after it has been clearly shown that Turkish exports damaged the Tunisian SMEs, especially in the fields of cloths and fabric.

“This level of reserves is dangerous and might put Tunisia in front of difficulties in importing food, medicines and fuel,” Reuters quoted Economist Ezzedine Suwaidan as saying.

Suwaidan saw that this condition is alarming for a country that is getting prepared to enter the global financial market this year and issue bonds worth USD1 billion.

The Tunisian parliament approved on Tuesday a plan presented by the central bank to sell bonds worth USD1 billion to fund the state budget of 2018 in the second half of March.

In a related matter, a Saudi economic delegation started on Wednesday discussions on touristic, health, industrial and trade sectors through a visit to Tunisia with the aim of getting to know the available investment opportunities and launching joint projects.

Tunisia-Saudi Arabia trade volume is estimated at USD320 million, a number that could possibly increase given the enormous economic potentials of both countries. Also, joint investments reach a total of around USD45 million.

Editor Picks