Fitch Ratings revealed that Tunisia, which is experiencing the worst political crisis since the Arab Spring protests in 2011, needs to salvage its foreign exchange reserves and reach an agreement with the International Monetary Fund to avoid another downgrade of its sovereign rating.
Economic hardships have already prompted Fitch to downgrade Tunisia, with the protests taking place in Tunisia due to President Kais Saied's decisions likely to lead to another downgrade of the current rating from B- to CCC, the last stop before the default. According to Fitch, the matter depends on several factors, one of which is external finance, and the rapid decline of foreign exchange reserves in the context of diminishing prospects for an agreement with the International Monetary Fund.
According to Fitch, the failure to reach the agreement, which is expected to be worth four billion dollars, will keep heavy reliance on local banks to provide financing as the country is now unlikely to be able to borrow from international bond markets as planned.
The International Monetary Fund commented on the events taking place in Tunisia, declaring that it is closely monitoring developments in the situation in Tunisia, with readiness to continue supporting Tunisia in dealing with the consequences of the Corona pandemic (Covid-19) and achieving a comprehensive job-rich recovery. Noting that Tunisia continues to face extraordinary economic and social pressures.
Source (CNBC Arabic website, Edited)
