The Tunisian dinar fell to its lowest rate in years trading at 2.83 against the euro and 2.412 against the US dollar.
Authorities explained the decline saying that Tunisia did not receive the last instalment from the International Monetary Fund (IMF) loan which would have contributed to helping the country’s foreign currency reserves recover. The authorities added that revenues from tourism have not been taking into account because the season had not ended yet.
Economists predict the Tunisian dinar will continue to fall against foreign currencies in light of the current situation.
The Tunisian government faces a continuing deficit in the trade balance as well as a decline in the tourism and investment sector which led to the fall in exchange rates.
Economists believe that it is only a matter of time before the dinar is floated, especially that is one of the prerequisites of the IMF loan.
Tunisia needs $2.85bn in external financing this year
Tunisian Finance Minister Lamia Al-Zuraibi said that her country needs around $2.85 billion in external financing this year and plans to issue a sukuk Islamic bond worth around $500 million to help cover the deficit.
Al-Zuraibi has also confirmed a report by Reuters that Tunisia plans to sell one billion euros’ worth of Eurobonds and hold a roadshow on 5 February, adding that more Eurobond issues later in the year are possible depending on how the country’s external financing needs are covered.
Al-Zuraibi said on the sidelines of a government development presentation and in reference to the sukuk plan that “after a delay of a few years, our plan this year is to issue $500 million to diversify our resources and cover the deficit of 2017,” reported Reuters.
This is the first time the Tunisian government has given details of the sukuk issue plan.
“If we don’t manage to fulfil our external financing needs of 6.5 billion dinars ($2.85 billion) then without a doubt we’ll go to capital markets again this year,” she added.