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IMF Announce US$1.75 Billion Arrangement with Tunisia

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Tunisian FlagBy Our Correspondent

Lagos (INVESTADVOCATE)- The International Monetary Fund (IMF),  Friday announced a Two-Year US$1.75 billion Stand-By Arrangement (SBA) with Tunisia.

 

According to Lagarde, the amount of US$1.75 billion is 400 percent (400%) of Tunisia‘s quota in the IMF. “This agreement will be subject to approval by the IMF’s Executive Board, which is expected to consider Tunisia‘s request next month” she said.

 

She said the SBA, once approved by the Executive Board, would support the Tunisian authorities’ economic agenda aimed at preserving fiscal and external stability, fostering higher and more inclusive growth, and addressing critical vulnerabilities of the banking sector.


Lagarde affirmed that the implementation of an appropriate policy mix will help preserve macroeconomic stability and, together with a better composition of public expenditures, will help restore fiscal space for priority capital and social spending.

“A prudent monetary policy will aim at containing inflation while safeguarding the stability of the banking sector. Greater exchange rate flexibility—coupled with structural reforms to improve the competitiveness of the economy—will contribute to improving Tunisia’s external position and rebuilding foreign reserve buffers” the IMF boss said.

She further affirmed that the SBA will support the implementation of the Tunisian authorities’ reform program to promote private investment, foster sustainable job-creation, reduce economic and social regional disparities, and strengthen social policies to protect the most vulnerable.

“These reforms are expected to help address many of Tunisia’s pressing economic and social challenges, and contribute to reducing risks that could arise from a worsening of the international economic environment or from protracted political uncertainty” Lagarde said.

 

Post Arab Spring Tunisia in the wake of the uprisings of 2011, Islamic finance has been reported as the solution to decades of unemployment and economic inequality in the country and other parts of the region.

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