Reuters le Mardi 29 Avril 2014

Tunisia's currency reserves fall to record low

Tuins - A worsening trade deficit has further eroded Tunisia's foreign currency reserves, which are now equal to just 93 days of import cover, official figures showed on Monday.
Tunisia's currency reserves fall to record low
 Tunisia's central bank said on its website, foreign currency reserves stood at 10.39 billion Tunisian dinars ($6.50 billion)by April 25, equal to 93 days of import cover, compared with 102 days registered in the same period a year earlier.

Central bank governor Chadli Ayari told Reuters last week that the decline in reserves to "dangerous levels" was due to a worsening trade deficit and said the government may consider imposing restrictions on imports of luxury goods.

Tunisia's trade deficit rose 36 percent in the first quarter of this year compared with the same quarter last year, official data showed this month.

The State Statistics Institute said the deficit grew from 2.418 billion Tunisian dinars ($1.52 billion) in the January-to-March quarter of 2013 to 3.290 billion dinars in the same quarter of this year.

Three years after an uprising against Zine el-Abidine Ben Ali that inspired the "Arab Spring" revolutions, Tunisia is on its way to political stability with a new constitution and the promise of elections later this year.

But the government's challenge is to cut public spending and high subsidies without fueling the kind of discontent that toppled Ben Ali. His overthrow was caused partly by grievances over unemployment and high prices that are still very real for many Tunisians.

Tunisia's budget deficit is set to grow to 8 percent of gross domestic product this year, mostly due to subsidies on fuel and basic goods and public service wage costs.

Prime Minister Mehdi Jomaa this year announced external borrowing needs for this year would be $8 billion - nearly double the initial estimate in the government's budget plan.

($1 = 1.5989 Tunisian dinars);_ylt=AwrBJSDjel9T4R4AK0HQtDMD

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