ECONOMY

IMF approves $1.74b standby loan for Tunisia

The International Monetary Fund on Friday approved a two-year, $1.74 billion standby loan for Tunisia. (File photo: Reuters)

The International Monetary Fund on Friday approved a two-year, $1.74 billion standby loan for Tunisia to support the government as it implements economic reforms.

The funds are to be used to shore up the country’s defenses against external and internal shocks while it pushes ahead to strengthen the banking system, fix government finances and boost jobs and incomes, the IMF said.

“Tunisia has embarked on a moderate economic recovery while facing a challenging international economic environment and pursuing a political transition,” said IMF deputy managing director Nemat Shafik in a statement.

“A fragile banking sector, pressing social demands, widespread regional disparities, and high unemployment are key challenges, together with widening external and fiscal deficits.”

Shafik said the government’s reforms have begun to address vulnerabilities by tightening monetary policy, allowing the Tunisian currency to fluctuate more and reducing subsidy burdens on the state.

“The authorities’ program - supported by a two-year stand-by arrangement - will help strengthen investor confidence and the resilience of the economy,” Shafik said.

“With full implementation of the program, Tunisia will be in a better position to respond to future shocks and meet the pressing needs of its population.”

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Last Update: Friday, 7 June 2013 KSA 22:17 - GMT 19:17
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