IMF set to give loan Tunisia $1.7 billion

WASHINGTON - Agence France-Presse

The IMF Managing Director Christine Lagarde speaks at a conference. AFP photo

The International Monetary Fund has 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 on June 7.

“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.