Tunisia Keen to Fulfill Foreign Debt Obligations

People shop for fruits at Sidi Bahri market in Tunis, Tunisia August 12, 2021. Picture taken August 12, 2021. (Reuters)
People shop for fruits at Sidi Bahri market in Tunis, Tunisia August 12, 2021. Picture taken August 12, 2021. (Reuters)
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Tunisia Keen to Fulfill Foreign Debt Obligations

People shop for fruits at Sidi Bahri market in Tunis, Tunisia August 12, 2021. Picture taken August 12, 2021. (Reuters)
People shop for fruits at Sidi Bahri market in Tunis, Tunisia August 12, 2021. Picture taken August 12, 2021. (Reuters)

Tunisia will continue to fulfill its foreign debt obligations, and it has started preparatory work for an International Monetary Fund (IMF) deal, Prime Minister Najla Bouden said on Friday, as talk of a possible default swirls among local and foreign analysts.

“The Tunisian state holds and will continue to meet its external debt obligations due to the level of Tunisia’s foreign exchange reserves,” Bouden said at an economic conference in Sousse.

The North Africa country resumed talks last month with the IMF on a loan package predicated on Tunis imposing painful and unpopular reforms.

Bouden told the conference the government had started preparing an advanced draft in order to reach a deal with the IMF that will send positive signals to partners and allow for an improvement in its credit rating.

The country is facing its worst economic crisis after its economy contracted 8.8% last year and the fiscal deficit reached a record 11.4%.

Central bank governor Maroaune Abassi said on Thursday the government hopes to reach an agreement with the IMF in the first quarter of next year on a bailout package.

He added the agreement with the IMF will be a very good sign that Tunisia will start its reforms and could push growth.

Central bank figures showed on Friday that foreign currency reserves had reached 7.02 billion, the equivalent of 119 days of imports.

Finance Minister Sihem Boughdiri said at an economic conference that Tunisia is far from rescheduling its debts within the Paris Club, despite its financial difficulties.

Tunisia was plunged in crisis in July when the president sacked the government, suspended parliament and seized an array of powers. A new government, with reduced powers, was announced in October.

The country has received economic aid from the European Union and is seeking its fourth aid program in 10 years from the IMF, aiming to receive a nearly $4 billion loan before the end of the year.



Gold Rebounds to End 6-Session Losing Streak as Dollar Rally Pauses

A view shows ingots of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024. REUTERS/Alexander Manzyuk
A view shows ingots of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024. REUTERS/Alexander Manzyuk
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Gold Rebounds to End 6-Session Losing Streak as Dollar Rally Pauses

A view shows ingots of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024. REUTERS/Alexander Manzyuk
A view shows ingots of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024. REUTERS/Alexander Manzyuk

Gold prices rebounded on Monday, having posted losses in the previous six sessions, with gains driven by a pause in the dollar's rally, while investors await comments from the Federal Reserve officials for clarity on the interest rate trajectory.
Spot gold rose 1% to $2,587.83 per ounce by 0917 GMT, moving away from a two-month low hit on Thursday. US gold futures were up 0.9% at $2,592.20.
Gold prices last week saw their biggest weekly decline in over three years as expectations of less-aggressive interest rate cuts by the Fed boosted the dollar.
However, the dollar was holding flat below Thursday's one-year high after rising 1.6% last week. A softer dollar makes bullion less expensive for buyers holding other currencies, Reuters said.
"We can look to the dollar for a significant part of the current gold price corrections ... I'm not saying you've found a solid physical floor yet, but clearly, some opportunistic buying is coming in to support the market as well," independent analyst Ross Norman said.
"As the year ends, we will see volatility in gold prices and there'll be some books clearing and profit-taking, regardless of what the Fed does in December."
Recent US economic data has reduced expectations for a December rate cut by the Fed. At least seven US central bank officials are due to speak this week.
Higher interest rates make holding gold, which doesn't pay any interest, less attractive.
"President Trump's inauguration is likely to see an ongoing strengthening of the USD (US dollar), which is negative for gold in the short to medium term. However, as his stated policies are likely to be significantly inflationary in the long term, this will benefit gold," said Michael Langford, chief investment officer at Scorpion Minerals.
Spot silver rose 1.4% to $30.63 per ounce, platinum added 1.4% at $951.59 and palladium climbed 1.8% to $967.62.