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Tunisia: Govt seeks fund from central bank to pay foreign debts

Published

11 months ago

February 1, 2024

To settle critical international debts, such as bonds totalling 850 million euros ($920 million) that mature on February 16, the Tunisian government has resorted to asking the central bank for direct financing.

This was announced by Finance Minister Sihem Boughdiri, who revealed that given the lack of external funding, the government asked the central bank for extraordinary direct funding of 7 billion dinars ($2.25 billion) to close a budget shortfall this year, according to sources quoted by Reuters.

Bougdhiri told the parliament finance committee that, “Despite all the difficulties in public finances, Tunisia is committed to paying its foreign debts on time in order to preserve its national sovereignty.”

In 2023, Tunisia settled all of its foreign debts, eliminating any chance that it would default. However, experts predict that 2024 would be extremely challenging since the government will have to pay off $4 billion in foreign debt, which is 40% more than it did in 2023.

The finance committee was informed by central bank governor Marouan Abassi that repaying an 850 million euro loan would affect the currency rate and result in a drop in foreign exchange reserves equal to the amount required for imports for 14 days.

The governor of the bank has cautioned against the central bank’s direct financing of the budget through the purchase of state bonds, a move Saied stated last year would require a rewrite of the legislation.

Abassi has also warned against the significant dangers associated with the government’s plans to require the bank to purchase Treasury bonds, including the potential to push inflation higher and depreciate the value of Tunisia’s currency. Saying that “a Venezuelan scenario will be repeated in Tunisia,” he warned that the action would uncontrollably escalate inflation, which may reach triple digits. He was alluding to the recent economic catastrophe in Venezuela that resulted in hyperinflation.

Tunisia has had a lot of trouble getting outside support from the West ever since President Kais Saied dissolved Parliament in 2021, took almost total control of the country, and started ruling by decree in what the opposition called a coup.

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Moroccan annual inflation rises to 0.8% in November

Published

2 days ago

December 21, 2024

Ifeoluwa Dada

Morocco’s statistics office has confirmed that the country’s annual inflation rate, as determined by the consumer price index, increased from 0.7% in October to 0.8% in November.

Monthly, consumer prices decreased by 0.2% from October.

The primary driver of inflation, food costs, grew by 0.8% compared to the previous year, while non-food inflation climbed by 0.7%. Core inflation, which does not include more erratic items like food, increased 2.6% annually and 0.2% monthly.

According to the central bank, inflation is expected to average 1% this year, down from 6.1% last year.

Despite the Al-Haouz earthquake, a spike in inflation, and worldwide economic challenges, Morocco’s GDP grew by 3.4% in 2023.

A recovery in tourism, robust industrial exports, and rising private consumption—all bolstered by prudent macroeconomic policies—were the main drivers of growth.

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Nigeria’s $42bn foreign reserves enough for 9 months’ imports— Central Bank

Published

3 days ago

December 20, 2024

Ifeoluwa Dada

According to Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), the nation’s $42.01 billion in foreign reserves can cover imports of goods and services for almost nine months.

Cardoso promised Nigerians improved economic fortunes in 2025 while addressing the Senate Committee on Banking, Insurance, and Other Financial Institutions yesterday in Abuja at the presentation of the performance index report.

Cardoso stated: “External Reserves rose from $ 38.35 billion it was on September 30, 2024, to $ 42.01 billion as of December 12, 2024”.

He clarified that third-party receipts in Q3 2024 and revenues from taxes connected to crude oil were the main drivers of the rise in foreign reserves during the specified time.

“We saw remarkable improvements in our trade balance and maintained a current account surplus,” he added.

“Our external reserves level can finance over 9.09 months of import of goods and services or 13.91 months only, higher than the international benchmark of 3.0 months and a robust buffer against shocks”.

On cash shortage, the CBN boss reiterated the N150 million fine against any branch of banks caught illegally distributing new Naira notes to currency hawkers and unscrupulous elements and said the Nigerian economy will improve in 2025 through policies and measures.

He predicted a stronger economic future: “Despite our economy’s challenges, there are clear reasons for optimism.

“The gradual stabilization of the forex market, ongoing banking sector recapitalization, and positive growth trends in key sectors, especially the services sector, indicate a path toward recovery and stability.”