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Tunisia’s Foreign Reserves Hit Record High

Tunisia’s Foreign Reserves Hit Record High

Wednesday, 12 August, 2020 - 08:30
People walk out of the Central Bank in Tunis, Tunisia. File photo: Reuters

Tunisia’s foreign exchange reserves have risen to DT21.5 billion, which will allow the country to cover its imports to a record period of 142 days, the Central Bank announced.

Observers said that Tunisia recorded an increase in its ability to cover its imports by about 47 days, compared to the same period in 2019, during which the local foreign exchange reserves were estimated at DT17 billion.

Despite the significant rise in the reserves, the total volume of refinancing the local economy dropped by at least DT4.241 billion, standing at about DT10.794 billion compared to DT15.036 billion during the same period in 2019.

The state budget deficit deepened significantly during the first half of this year, reaching DT3.8 billion, compared to DT2.4 billion during the same period in 2019, according to the Central Bank.

The Tunisian government expects a negative performance for the Tunisian economy, at a rate of seven percent by the end of the year, after the Finance Ministry expected an economic growth rate of 1.7 percent when preparing the 2020 budget, a figure that has become far-fetched.

A number of Tunisian economists and international financial missions, led by the International Monetary Fund (IMF) and the World Bank, expected the Tunisian economy to face many difficulties, which will delay its recovery.

Aside from the collapse of the Tunisian dinar exchange rate and a record deficit in the trade balance, the US government guarantee was decreased from 17 years in 2011 to about 6 years, and the Japanese International Cooperation Agency (JICA) guarantee dropped to 10 years.

The dire economic situation came amid a high debt volume, which is demanding financial loan installments of no less than $1 billion annually from 2021 to 2025.

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