Tunisia will restrict some imports to tackle trade deficit-PM


Reuters

UPDATE 1-Tunisia will restrict some imports to tackle trade deficit-PM


(adds details)
    TUNIS, April 21 (Reuters) - Tunisia will restrict the import
of some goods to tackle its widening trade deficit and protect
foreign reserves as the local dinar currency slides to historic
lows against the euro and dollar, Prime Minister Youssef Chahed
said on Friday.
    Praised for its successful democratic transition after a
2011 uprising, Tunisia has struggled to progress with tough
economic reforms to reduce public spending as demanded by the
IMF and its international partners.
    "The fall of the dinar reflects this enormous trade deficit
but there is no need to panic. We will take some decisions.. We
will limit some random imports. We have a lot of unnecessary
imports," he told reporters at an event in Sfax city.
    The dinar traded at 2.64 against the euro and 2.46 against
the dollar on Friday for the first time, traders told Reuters.
    Chahed said a cabinet meeting next week would decide on the
details of the restrictions. Tunisia's trade deficit expanded by
57 percent to reach $1.68 billion in the first quarter of this
year because of a jump in imports.
    "We will reduce imports of many luxury goods," a government
official told Reuters.
    The local currency has continued its sharp decline since
Finance Minister Lamia Zribi said last Tuesday the central bank
would reduce interventions so that the value of the dinar
gradually declines, though she said it would prevent a dramatic
slide.
    The IMF agreed this week to release a delayed $320 million
tranche of Tunisia's$2.8 billion in loans. It called for
tighter monetary policy that would counteract inflationary
pressures, and said "greater exchange rate flexibility would
help narrow the large trade deficit".
    The UTICA industry and business employers' association, one
of the country's major economic lobbying groups, urged the
government to tackle the dinar's drop. It warned that the sharp
decline of currency will increase economic pressures and hit
companies that import raw materials from abroad.

 (Reporting by Tarek Amara; writing by Patrick Markey)
 ((pat.markey@thomsonreuters.com; +213-661-692993; Reuters
Messaging: pat.markey.thomsonreuters.com@reuters.net))

Keywords: TUNISIA ECONOMY/IMPORTS (UPDATE 1)



This article appears in: Politics , Stocks , World Markets , Economy


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