Tunisia Considers Central Bank Borrowing to Address Economic Crisis

Tunisia is considering borrowing billions from its central bank to address its economic crisis and plug budget deficits. The government’s request comes after revising laws to ensure the bank’s autonomy.

The Central Bank is one of several institutions President Kais Saied has sought to weaken since coming to power. The government wants the central bank to buy up to 7 billion Tunisian dinars ($2.25 billion) of interest-free bonds to help close a budget deficit of 10 billion dinars ($3.2 billion).

However, this raises concerns about maintaining the bank’s independence from politics, inflation, and fear from foreign lenders and investors.

The move comes as Tunisia is unable to borrow from its traditional creditors, including the International Monetary Fund, whose proposed $1.9 billion bailout remains in limbo.