3000 MD loan requested by government will lead to fall in foreign exchange reserves (Marouane Abassi)

The loan of 3,000 million dinars that the government intends to contract with the Central Bank of Tunisia (BCT) will not exacerbate inflation yet it will decrease foreign currency reserves by 14 days of import, said Governor of the Central Bank of Tunisia Marouane Abassi during a parliamentary committee hearing held Wednesday. «This loan will have an impact on the exchange rate,» he added. During this hearing session dedicated to the review of the bill exceptionally authorising the Central Bank of Tunisia (BCT) to grant facilities for the Treasury, Abassi stressed that this loan remains cyclical, noting that the facilities granted by the BCT, for 2020, were mainly earmarked to consumption, which favored inflation. While recognising that the repayment of debts is one of the attributes of national sovereignty and helps to strengthen investor confidence, the BCT governor insisted on investment as an "effective" solution even to create wealth. «The current situation remains difficult due to the high debt rat es and the low growth rate,» he pointed out, pointing to other factors behind this crisis, including lower investment and savings and higher imports which led to a deficit in the balance of payments. Despite this, the foreign exchange reserves cover 118 days of imports, he added. Source: Agence Tunis Afrique Presse