August 24, 2017 / 12:07 PM / a year ago

Tunisia's currency reserves recover slightly with World Bank loan

TUNIS, Aug 24 (Reuters) - Tunisia’s foreign currency reserves have risen slightly to 13.22 billion dinars, benefiting from the World Bank’s disbursement of a $500 million loan, a week after they fell to lows not reached for nearly three decades.

Last week, reserves had fallen to 11.59 billion dinars ($4.76 billion), enough for just 90 days of imports, which officials and experts said was the weakest level since 1986.

But according to figures posted on the central bank’s website late on Wednesday, the reserve has now recovered to 13.22 billion dinars ($5.43 billion), equal to 103 days of imports. The reserve is still lower than it was a year ago, when it covered 117 days of imports.

Sources told Reuters that the change comes after the World Bank on Wednesday disbursed a loan of $500 million to help finance the state budget and to support Tunisia’s economic reform program.

Ezzedine Saidan, a local economist, said boosting reserves through loans - rather than exports, remittances or tourism revenues - was problematic as it would only increase Tunisia’s debt.

Tunisia’s economy has struggled since a 2011 uprising, and the government has struggled to make tough economic reforms that would reduce public spending, as demanded by international lenders.

Tourism revenues rose to $613 million between Jan. 1 and Aug. 10, this year, 19 percent higher than the same period in 2016, reflecting a recovery in a vital sector crippled two years ago by attacks on foreign holidaymakers.

But the trade deficit widened by 26 percent to 8.63 billion dinars in the first seven months of 2017, according the State Statistics Institute.

In efforts to curb its widening trade deficit and protect foreign reserves, the government imposed restrictions on importing some goods three months ago. ($1 = 2.4367 Tunisian dinars) (Reporting By Tarek Amara; Editing by Aidan Lewis, Larry King)

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