São Paulo – Tunisia and the International Monetary Fund (IMF) have come to an agreement about a US$ 1.75 billion loan to the country. The announcement was made on Friday (19) by the managing director at the IMF, Christine Lagarde. The agreement, which must be approved by the executive director at the IMF, is for 24 months. The Tunisians may withdraw the funds in case of need.
According to Lagarde, the total represents 400% of the Tunisian IMF quota and should serve as support to the economic reform programme of the Tunisian government. She did not provide details about the requirements made by the institution to grant the loan, but said that “the implementation of an appropriate policy mix” will help guarantee macoreconomic stability and space for priority spending and social investment.
As part of this “mix”, she mentioned “better composition of public expenditure”, a “prudent monetary policy” to contain inflation and guarantee stability of the banking sector and “greater exchange rate flexibility” to improve the competitiveness of the economy and its international reserves. All of this in parallel with “structural reforms to improve the competitiveness of the economy”.
Lagarde pointed out that the agreement should help the government in its project to promote private investment, generate jobs, reduce inequality and strengthen social programmes.
The IMF also negotiated a loan with Egypt, but for the value of US$ 4.8 billion. In this case, however, there is no agreement yet. Lagarde said on Sunday (21) that there has been “progress” in talks during the weekend, which took place in the IMF and World Bank spring meetings in Washington. She pointed out that the work should continue in coming weeks.
*Translated by Mark Ament
