TUNIS, Tunisia: The Assembly of People’s representatives approved by a large majority of 92 votes out of 133 an amendment to an article that prohibited the central bank from financing the state treasury.
The new measure allows the central bank to lend the state 7 billion Tunisian dinars ($2.2 billion), to be repaid interest-free over 10 years after a three-year grace period.
The loan is to partially cover a budget deficit of 28.7 billion dinars planned for 2024, including 16 billion covered by external borrowings, of which about 10 billion are still missing.
During the debate before the vote, Finance Minister Sihem Boughdiri Nemsia said the funds are not intended to finance current expenditure.
She said three billion dinars will help repay the old foreign debt by the end of February, but “a part will be used to finance public investments”.
Opposition representatives called it an “easy fix” and said it was unreliable, while others said it was badly needed as Tunisia’s debt hovers around 80 percent of its GDP.
In October 2022, the IMF agreed in principle to a loan of around $2 billion, but President Kais Saied later rejected it on the grounds that the reforms he demanded in return were not sustainable for Tunisians.
Central bank governor Marouane Abassi, whose mandate expires in mid-February, warned that his institution’s loan would lead to a “decline in foreign exchange reserves” with potentially negative effects on the Tunisian dinar.
