Qatar’s support to smooth the Tunisian currency crisis

qnb-tunisiaPolitical crisis is continuing to do damages to the Tunisian economy and rating agencies have been continuously rating it negatively due to political uncertainty. The country is on the verge on facing the same foreign currency reserves that Egypt is going through before the intervention of Qatar lately, sources revealed.  Qatar National Bank is reported to have deposited half a billion dollars to support Tunisia’s foreign currency reserve after pressure for reforms increased.
Tunisia’s gross domestic product budget deficit for 2013 stands at 6,8%.  The World Bank and the International Monetary Fund have been increasing their pressure for reforms directed towards reducing the budget deficit and increase efforts to end the crisis.
The $500 million loan deposited by Qatar National Bank in the Tunisian Central Bank is yet to be confirmed by officials but a senior central bank official, under the condition of anonymity, confirmed the transition. He said that the deposit will support “foreign currency reserves” and serve as “a shot of oxygen for the economy”.
Qatar has been supportive of the Islamic parties which rose to power after the Arab Spring. Most of these regimes have been faced with economic crisis due to the political instability.
Last month, Fitch reduced Tunisia’s sovereign rating and warned that it could cut further on political uncertainty due to the potential damaging effects it poses to the economy. The African Development Bank also cancelled a loan of almost $300 million because of instability.
Tunisia’s deposit will shore up the economy and also help shippers of essential goods such as grain to find foreign currency to pay for imports. The amount is expected to refunded at a rate lingering between 2,5% and  3% over the next 5 years.

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