Tunisia expects IMF loan deal in weeks, central bank governor says

The International Monetary Fund logo is seen at the IMF headquarters in Washington, U.S., October 14, 2017. REUTERS/Yuri Gripas/File Photo

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JEDDAH, Saudi Arabia, September 18 (Reuters) – Tunisia expects to reach an agreement with the International Monetary Fund in the coming weeks on a loan of between $2 billion and $4 billion over three years, the governor of Tunisia said on Sunday. the central bank.

Tunisia, which is going through its worst financial crisis, is seeking an IMF loan to save public finances from collapsing.

“The size is still being negotiated and I think it will be between $2 billion and $4 billion, we hope to reach an agreement at staff level in the coming weeks,” Marouan Abassi told Reuters.

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The government and the powerful UGTT union last week signed an agreement to raise public sector wages by 5%, a move that could ease social tensions. But they announced no further agreement on the reforms needed for an IMF bailout.

Abassi said the wage deal was an important milestone for negotiations with the IMF and would give a clear picture of the weight of wages in GDP in the years to come.

“This will give us a clear vision of the wage bill which should drop in the years to come,” he added.

Fitch Ratings said Friday that Tunisia’s wage deal increases the likelihood of an IMF deal.

Abassi said the possible deal would open doors for bilateral funding, including with Japan and Gulf countries.

“We have advanced discussions with Saudi Arabia on bilateral funding,” he added.

The IMF has signaled that it will not go ahead with the bailout package demanded by Tunis unless the government appeals to the UGTT, which claims to have more than a million members and has already crippled the economy through strikes.

Tunisia is struggling to straighten out its public finances as discontent grows over inflation running at nearly 9% and a shortage of many food products in stores because the country cannot afford certain imports.

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Reporting by Aziz El Yaakoubi in Jeddah, Writing by Tarek Amara in Tunis, Editing by Emelia Sithole-Matarise and Andrew Cawthorne

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